Klecker v. Sutton, KCD

• Court: Court of Appeal of Missouri (US)
• Citation: 523 S.W.2d 558
• Docket Number: No. KCD,KCD
• Parties: Jack E. KLECKER, Plaintiff-Respondent, v. John D. SUTTON et al., Defendant-Appellant. 26626.
• Decision Date: 05 May 1975

Page 558

523 S.W.2d 558 Jack E. KLECKER, Plaintiff-Respondent,
v.
John D. SUTTON et al., Defendant-Appellant. No. KCD 26626. Missouri Court of Appeals, Kansas City District. May 5, 1975.

Page 559

Roger J. Barbieri, Barbieri, Combs & Gotschall, Kansas City, for defendant-appellant.

Major W. Park, Jr., Gage, Tucker, Hodges, Kreamer, Kelly & Varner, Kansas City, for plaintiff-respondent.

Before WASSERSTROM, P.J., and SHANGLER and DIXON, JJ.

DIXON, Judge.

Plaintiff's suit in the court below was grounded on fraud against a corporate defendant and its officers and agents. Various dismissals and default judgments resulted in the plaintiff's case being submitted against the individual defendant Sutton alone. The jury verdict was for $15,000 actual damages and $15,000 punitive damages against defendant Sutton. He has appealed. The appeal raises issues concerning the propriety of the plaintiff's verdict-directing instruction and the instruction on damages. On those issues, the verdict and judgment are reversed and the cause remanded.

This opinion is written on reassignment after a motion for rehearing was sustained. The matters raised in the motion for rehearing and upon resubmission will be adverted to as necessary in the course of this opinion.

Preliminarily to a consideration of the defendant's claim error as to the principal instruction, a procedural contention must be resolved. Defendant in his brief here raises three points. The first and third points refer specifically by number to Instruction No. 4 which was the plaintiff's damage instruction. The first point briefed clearly attacks the damage Instruction No. 4. The last point briefed, while specifically directing attention to Instruction No. 4, is

Page 560

in terms and content an attack on the plaintiff's verdict directing Instruction No. 2. Paragraph 12 of the defendant's motion for a new trial objects specifically to the giving of Instruction No. 2 on the same grounds and in almost identical language with the third point in the defendant's brief. Despite the misnumbering of the instruction, the plaintiff could not have been misled by the error. That he was not is certain, for plaintiff countered the point and argument of defendant head-on in the first point in his brief. Plaintiff's contention on rehearing that the original opinion was based on an instruction 'not appealed from' is without merit. The parties on the original submission which was on brief alone joined issue on the claim of erroneous submission under Instruction No. 2, and nothing has been presented to indicate that plaintiff was misled to his prejudice by the misnumbering of the instruction in the defendant's brief.

The defendant's attack on both the verdict-directing instruction and the damage instruction are essentially claims that the instructions lack evidentiary support. The motion for rehearing referred extensively to record evidence as supporting the submission which was not set forth in the original opinion. In order to respond to that portion of the motion, a detailed statement of the facts as they were developed in evidence follows: The finding of the jury being for the plaintiff, he is entitled to have all the evidence favorable to his theory and submission and all legitimate inferences therefrom considered to determine if an evidentiary support for the theory submitted can be found.

So considered, the evidence establishes that the plaintiff in response to an advertisement contacted Jake Edwards Old Southern Pit Barbecue System Inc. to investigate a franchise for a 'food service.' Plaintiff was by occupation an automobile mechanic and had little or no business experience. His first contact was with a Mr. Hansen described as vice president and the defendant Sutton who was President of Jake Edwards. He was given a brochure which described the offered franchise and quoted a price of $12,500. In this conversation, the plaintiff was told that additionally the 'equipment package' would be $14,000. The brochure indicated that financing would be available. Sutton said financing would be available to plaintiff from a bank and that the Jake Edwards Company would purchase the equipment and make the arrangements for plaintiff to make the payments, 'In other words the paper would be turned over to me and I would make the payments.' The equipment was to be installed on a turn key basis. There were various other representations made as to commissary service management assistance via computer. By telephone, Sutton suggested a location and, after an inspection and consultation with his wife, plaintiff agreed to the location. Sutton and Hansen then presented a franchise agreement which the plaintiff signed after the price was reduced to $11,000 because as plaintiff testified, 'He'd (Sutton) like to get a franchise started.' The price of the equipment package was also reduced to $12,000. Two thousand five hundred dollars was paid by deposit of a certificate representing shares in a mutual fund, the balance of the $11,000 to be paid on the final site selection. A building was in fact selected, a lease between the corporate defendant and the owner of the building executed and assigned to plaintiff at the same rent. This required a cash expenditure of $2,900. Plaintiff then delivered $11,000 and retrieved his mutual funds.

Thereafter, the plaintiff was tendered an equipment package contract which plaintiff testified was satisfactory as to price and equipment but which by a supplemental agreement required that the plaintiff's franchise be additional collateral for the indebtedness. Plaintiff refused to execute this agreement and around October 1, 1968

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retained counsel. This suit was filed in October, 1968.

The evidence concerning the corporate affairs is skimpy. Plaintiff offered the certificate of incorporation showing that Sutton was President and that one Lumby was also an officer. A portion of the corporate minutes was also offered to show that in the fall of 1968 Lumby had misappropriated company funds and that Sutton and the company attorney in October, 1968 recovered $5,000 which was deposited in the company account. Sutton was a required signator on the bank accounts, but checks had been honored without his signature. The amount and nature of these checks was not shown. After Lumby had left the company, Sutton actively managed its affairs. From October, 1968 to June, 1969, approximately $3,000 was withdrawn from the corporate account by checks made to cash and signed by Sutton. Sutton made an explanation of some but not all of these checks, and some bore notations of purpose. The exhibits are almost illegible and all the notations cannot be read. Some appear to be related to...