King v. Exxon Co., U.S.A.

Citation618 F.2d 1111
Decision Date12 June 1980
Docket NumberNo. 78-2487,78-2487
Parties6 Fed. R. Evid. Serv. 948 Charles L. KING, Plaintiff-Appellee, v. EXXON COMPANY, U.S.A. and Exxon Corporation, Defendants-Appellants.
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

W. Swan Yerger, Robert T. Gordon, Jr., Jackson, Miss., for defendants-appellants.

Ingram & Matthews, Carroll H. Ingram, Jolly W. Matthews, III, James R. Fowler, Jr., Hattiesburg, Miss., for plaintiff-appellee.

Appeal from the United States District Court for the Southern District of Mississippi.

Before WISDOM, FAY and TATE, Circuit Judges.

FAY, Circuit Judge:

Plaintiff-appellee Charles L. King managed a service station owned by defendant-appellant Exxon Corporation. A written Service Station Manager Agreement established the rights and duties of King and Exxon. According to the agreement, Exxon was to employ King for an indefinite period of time; a termination provision specified, however, that "Exxon or Manager may terminate this Agreement at any time by written notice to the other delivered in person or mailed to the adress (sic) set forth above." Record, vol. I, at 6 (emphasis added).

Having concluded their employment relationship, the parties now dispute whether there was sufficient evidence to find that Exxon breached the manager agreement by failing to give King the requisite written notice of termination. Assuming that Exxon did breach the agreement, Exxon disputes the award of $20,000 damages to plaintiff King, contending that the jury verdict is grossly excessive, contrary to law, and contrary to the overwhelming weight of the evidence.

Our review of the record reveals ample evidence to support a finding that Exxon breached the termination provision of the manager agreement; we therefore affirm the district court judgment in favor of plaintiff King. We agree with defendant Exxon, however, that the district court judge failed to give the jury a proper guide for determining the amount of damages to be awarded. The judgment for $20,000 is reversed and remanded for a new trial on the damage issue alone.

I. Facts

We cull the facts of this case from the accumulated testimony of two trials which preceded this appeal. Plaintiff Charles L. King took over the operation of the University Exxon Service Station in Hattiesburg, Mississippi on April 26, 1973. On May 7, 1973, King executed a Service Station Manager Agreement with Exxon. This written agreement set forth the employment arrangement between King and Exxon, and provided, inter alia, that the agreement was terminable by either party at any time upon delivery of written notice. The manager agreement specified that King would receive commissions on sales of Exxon-owned products and on service work, in accordance with a schedule Schedule "A" attached to the agreement. Both the manager agreement and Schedule "A" provided that Exxon reserved the right to revise and change Schedule "A" from time to time. Record, vol. I, at 5, 7.

King operated the service station pursuant to the agreement through the summer and into the fall of 1973. He claims, however, that the written manager agreement was only a part of the contractual arrangement between himself and Exxon. He testified that he entered into the manager agreement with Exxon with the understanding that he would be made a dealer 1 within ninety days. Exxon's alleged promise of a dealership was made verbally; plaintiff admitted "there was nothing in writing on this." Record, vol. III, at 6. In early October, 1973, King was summoned to the office of Exxon's sales representative for the Hattiesburg area. King went to the meeting fully expecting to discuss the details of a dealership contract, only to learn that Exxon had no plans to make him a dealer at this time. Instead, the Exxon representative presented King with certain changes which Exxon was implementing in its manager agreements. King advised the representative that he did not like the proposed changes in his manager's contract, whereupon he was told, "Chuck, you have no choice. You sign it or we will put you out." 2 Record, vol. II, at 88. King testified that he refused to sign a new manager agreement and that he told the representative, "(Y)ou are going to have to put me out of here." Id. at 193. He then asked that his brother-in-law, the assistant manager of the service station in question, be given an opportunity to take over as manager of the station.

Following his meeting with the Exxon sales representative, King continued to manage the University Exxon station until November 27, 1973, when he was physically checked out of the station. On that date, the Exxon sales representative came out to the service station and inventoried the Exx on-owned products in stock. King signed the Exxon inventory list, which included a box with a checkmark next to the words "manager change." 3 King later testified that he was given no choice about being checked out of the service station; that he had not requested that Exxon remove him from the station; and that he did not agree to being checked out of the station. Record, vol. II, at 89, 183-84. After the inventory had been completed and signed, the Exxon representative asked King to sign a mutual cancellation and termination agreement; 4 King refused to sign because the termination was not mutual, and because he did not wish to leave the station. King testified that he never received written notice from Exxon advising him of the termination of his contract, and that he never gave Exxon written notice that he desired to terminate the contract himself.

After he was put out of the University Exxon station, plaintiff King unsuccessfully sought other employment in the Hattiesburg area. He subsequently went to Baton Rouge, Louisiana, where he obtained a job as truck driver with the company that had employed him prior to his position with Exxon.

II. The Lawsuit and the First Trial

Plaintiff King filed a diversity action against Exxon in December, 1975. His complaint alleged that Exxon had breached an oral contract to make King a dealer operator of the Exxon service station in Hattiesburg, Mississippi. In his portion of a joint pretrial order, plaintiff further contended that Exxon had breached its written contract in removing plaintiff from the premises and taking over his business. Record, vol. I, at 392. Exxon denied all of King's allegations while affirmatively alleging in the alternative that the plaintiff had terminated the written manager agreement, that the termination was mutual, or that the defendant had terminated the agreement in accordance with the contract terms.

The case was tried before a jury on June 29 and 30, 1977. A verdict was entered for Exxon, the jury finding that no oral contract had been made by the parties, and that the defendant had not breached the written agreement by failing to comply with its written termination provisions. Special Interrogatories, Record, vol. I, at 400-03. Plaintiff King moved for judgment n.o.v. and/or new trial; the court granted the motion for new trial on the written contract issue. In its order granting a new trial, the court stated:

The testimony of all the witnesses at the trial clearly established that the Defendant, Exxon Corporation, breached the written contract involved herein by failing to give written notice of its intention to terminate the contract between it and the Plaintiff, Charles L. King, in accordance with the terms of said contract. The overwhelming weight of the evidence showed that the Defendant, Exxon Corporation, did in fact breach the written contract. Therefore, this Court is of the opinion that the Jury's verdict as to whether there had been a breach of the written contract was contrary to the overwhelming weight of the evidence to such a degree that it shocked the conscience of the Court. The Court is further of the opinion that the Plaintiff's Motion for a New Trial as to whether there had been a breach of the written contract should be granted in order to prevent a manifest miscarriage of justice.

Record, vol. I, at 407-08

III. The Second Trial

Charles King's suit against Exxon was tried a second time on May 11, 1978. The jury was instructed to consider only the issue of "whether the plaintiff's written managerial contract, . . . with the defendant Exxon, was terminated in accordance with the provision thereof or whether it was in that respect breached by the defendant by failing to comply with the termination requirement contained in Paragraph 9 thereof." Record, vol. III, at 196-97. The judge emphasized to the jury that "we have no claim and you are not to consider any claim of any kind for breach of any oral contract with reference to any possible dealership." Id. at 196. The jury found for the plaintiff and assessed his damages at $20,000. Following the entry of judgment on the verdict, defendant Exxon filed motions for judgment n.o.v. and new trial, as well as a motion for remittitur or, alternatively, for a new trial on damages. The court denied all of defendant's motions. Defendant Exxon now appeals both the grant of plaintiff's motion for new trial after the first trial and the denial of its own post-trial motions after the second trial.

We affirm the district court's grant of plaintiff's motion for new trial after the first trial of the action, and the denial of defendant's motion for judgment n.o.v. after the second trial. We reverse, however, the district court's denial of defendant's motion for a new trial on the issue of damages, for reasons set out below.

IV. Plaintiff's Motion for New Trial

Defendant Exxon asserts that the district court erred in granting plaintiff King's motion for new trial after the first trial. We disagree. The proper standards for granting a new trial, and for appellate review of that grant, are very clearly set out in Bazile v. Bisso Marine Co., Inc., 606 F.2d 101, 105 (5th Cir. 1979).

As far as the motion for a new trial, the trial judge can grant a...

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