Koufakis v. Carvel
Decision Date | 24 April 1970 |
Docket Number | No. 182 and 183,Dockets 33732 and 33827.,182 and 183 |
Citation | 425 F.2d 892 |
Parties | John KOUFAKIS, Plaintiff-Appellee, v. Thomas CARVEL and Franchise Licensors, Inc., Defendants-Appellants. |
Court | U.S. Court of Appeals — Second Circuit |
George D. Marlow, Kew Gardens, N. Y. (Morris Marlow, Corona, N. Y., on the brief), for plaintiff-appellee.
Nicholas M. Pette, Jamaica, N. Y., (Leonard Toboroff, Yonkers, N. Y., and Joseph P. Napoli, Bayside, N. Y., on the brief), for defendants-appellants.
Before LUMBARD, Chief Judge, and MEDINA and FEINBERG, Circuit Judges.
The appellants Thomas Carvel and Franchise Licensors, Inc. appeal from a judgment against Franchise Licensors1 for $126,000 awarded, after a jury trial in the Eastern District of New York, to the appellee John Koufakis for breach of his franchise contract to operate Carvel Store Number 184 in Queens Village as an ice cream dealer. The jury by special verdict found that the appellants committed a substantial breach of the contract by improperly terminating it, and awarded $187,500 in compensatory damages; it also found that no punitive damages should be awarded. The trial judge granted a motion for a new trial which was based in part on the improper and prejudicial arguments of plaintiff's trial counsel, unless the plaintiff agreed to a remittitur of $61,500. Although both parties appealed, the appellee is now content with a verdict for $126,000. We reverse and order a new trial because of the numerous grossly prejudicial arguments made by plaintiff's counsel in summation and during trial, against which the trial judge's comments and charge gave little or no protection. As there must be a new trial, we also consider whether the question of punitive damages should have been submitted to the jury and whether the jury should have been allowed to evaluate the likelihood that the franchise would have been renewed after it expired.
A summary of the record shows that there was sufficient evidence to leave to the jury the question whether the appellants had improperly terminated Koufakis' franchise contract.
On June 2, 1958, John Koufakis and Carvel Stores of New York, Inc.,2 entered into a Dealer's Franchise Agreement whereby Koufakis was to run Carvel Store Number 184 until July 31, 1968, a period of ten years. The preamble to this agreement, which emphasized the importance of maintaining the high quality standards of Carvel products, stated:
A "Standard Operating Procedure Manual" was expressly incorporated as "an integral part" of the franchise agreement, which provided that the store was to be "maintained and operated in accordance with the specific provisions of the Manual." The agreement further provided that:
Carvel was also given the right to inspect the store "at any and all times desired by Carvel." Koufakis was obligated "promptly to correct any errors or omissions found by Carvel inspectors and officers." As regards the procedure for termination, the agreement stated:
"In the event that the Dealer should breach any of the terms of this agreement, or default in the performance of any of the obligations under the Manual, * * * and should such breach not be remedied to the satisfaction of Carvel within forty-eight (48) hours or such later time as Carvel may specify in a written notice to that effect mailed to the Dealer and then this agreement shall terminate fully and in all respects, and the Dealer shall then have no further rights hereunder."
As to renewal of the franchise, the agreement specified a ten-year initial term and, in the following paragraph, recited that "This agreement shall be automatically renewed for an additional period of — 0 — years. * * *"
There was testimony that Koufakis was on the "C.O.D. list" throughout the period of his dealership — that is, that he was to pay cash for all supplies delivered to him. Inspections of Koufakis' store did take place, and minor defects in operation were called to his attention. In June 1962, Carvel inspectors discovered non-Carvel ices stored in his freezer. Koufakis' explanation was that these ices were being stored there for a short time before being served at an outing for a Little League team which he sponsored and that they were not there for sale to the public. Carvel's attorneys apparently accepted this explanation, but they did make it clear to Koufakis that the presence of non-Carvel items in the store was a serious matter; in fact, they had Koufakis sign a $5000 confession of judgment to apply to future instances of such behavior.
Koufakis called as a witness Salvatore Russo, who was credit manager and later head of the accounting department for the Carvel organization until his voluntary departure on April 2, 1963. Russo testified that Koufakis was considered a slow-paying account, an "irritant," and a nonconformist by the officials at the central offices of Carvel. Regarding such nonconforming dealers as a group, Russo further stated that he attended a staff meeting of Carvel officers in March 1963, at which time Thomas Carvel remarked
The evidence showed that Koufakis, under subpoena, had testified on November 5, 1963 (after the above-described staff meeting), before a trial examiner of the Federal Trade Commission, which was then conducting an inquiry into Carvel's franchising practices.3 One of Koufakis' contentions was that this testimony so angered Thomas Carvel and others in the organization that they determined to get rid of him.
On August 24, 1965, Koufakis was notified that an inspection of his store had revealed some operational deficiencies and he was given 48 hours' notice to correct them; Koufakis apparently corrected the defects and sent a letter to Carvel on September 1, 1965, stating that he had taken corrective action and thanking Carvel for the inspections which assisted him to "judge my help."
On July 17, 1966, Martin Mannino, a Carvel field representative, inspected Store Number 184. He took samples of the various products and product components on the premises; these samples were stored by him in an ice chest in the trunk of his car during that day, and in his home freezer overnight. They were delivered the following day to St. Lawrence Dairy Testing Laboratory, an independent testing firm which regularly made tests for Carvel. Mannino testified that he bought other samples of take-home products — primarily pre-packaged pints of various flavors of ice cream stored in three display freezers — during "a period of ten days, or two weeks" thereafter. The St. Lawrence laboratory reports introduced in evidence by Carvel indicate that such samples were taken July 15, 16, 22, 23, 24, 25, 26, 27, 28, 29, 30, and 31, 1966. On July 30, July 31, and August 1, 1966, samples were apparently taken from Koufakis' freezers from which ice cream cones were dispensed. All of these samples were also delivered to St. Lawrence, although there was no testimony concerning the conditions under which they were transported from the store to the lab. As to the samples taken on July 17, Mannino testified that he left duplicate samples, in sterile jars, at Store Number 184 for Koufakis. The laboratory reports on this two-week series of samples showed some degree of dilution, contamination, or both, of some or all of the various products tested. It was Koufakis' claim that the samples were improperly taken and kept, that the tests were not properly made and reported, and that Carvel falsified the test results.
To continue reading
Request your trial-
Ohio-Sealy Mattress Mfg. Co. v. Sealy, Inc.
...case. Compare New York Central Railroad Company v. Johnson, 279 U.S. 310, 318, 49 S.Ct. 300, 73 L.Ed. 706 (1929); With Koufakis v. Carvel, 425 F.2d 892, 901, 903 (2d Cir. 1970), on which Sealy heavily relied in its post-trial briefs in the district court. We surely would not bind Sealy ther......
-
In re Universal
...This is a far cry from the type of egregious misconduct that cannot be alleviated by curative instructions. Cf. Koufakis v. Carvel, 425 F.2d 892, 901 (2d Cir.1970).61IV. Class Plaintiffs' Motion for Entry of Final Judgment Plaintiffs have also moved for the entry of final judgment. Vivendi ......
-
Ortiz v. New York City Housing Authority
...distinctions in addressing the jury. See Pappas v. Middle Earth Condominium Assn., 963 F.2d 534, 540-41 (2d Cir.1992); Koufakis v. Carvel, 425 F.2d 892, 905 (2d Cir.1970). However, appeals courts traditionally defer to a trial judge's determination as to whether counsel's improper conduct r......
-
Claudio v. Mattituck-Cutchogue Union Free Sch. Dist.
...nearly as explicit or egregious such that the integrity of the trial may be considered to have been compromised. Cf. Koufakis v. Carvel, 425 F.2d 892, 902 (2d Cir.1970) (repeatedly referring to defendant as a millionaire and multi-millionaire). In sum, the vast majority of questionable cond......
-
Preparing for common legal and factual issues
...or prejudice by: • Describing the plaintiff in argument as the little guy fighting the rich and powerful. [See e.g., Koufakis v. Carvel , 425 F.2d 892, 902 (2nd Cir. 1970); City Homes, Inc. v. Johnson , No. 1353, Sept. Term, 2019, 2020 WL 6253594, at *3–4 (Md. App. Oct. 23, 2020).] 20-27 Pr......
-
Table of cases
...Dental Association , 527 U.S. 526, 542-543, 545, 119 S.Ct. 2118, 144 L.Ed.2d 494 (1999), §§19:04, 19:14 , 19:51 Koufakis v. Carvel , 425 F.2d 892, 902 (2nd Cir. 1970), §20:91 Kumho Tire Ltd. v. Carmichael , 526 U.S. 137 (1999), §7:21 L LaMasa v. Bachman, 2005 WL 1364515 (N.Y.Sup. 2005), §21......
-
Preparing for common legal and factual issues
...or prejudice by: • Describing the plainti൵ in argument as the little guy ighting the rich and powerful. [See e.g., Koufakis v. Carvel , 425 F.2d 892, 902 (2nd Cir. 1970).] Describing the defendant as a big corporation out to make money. [See, e.g., Southern Pac. Co. v. Hayes , 391 S.W.2d ......
-
Table of cases
...Dental Association , 527 U.S. 526, 542-543, 545, 119 S.Ct. 2118, 144 L.Ed.2d 494 (1999), §§19:04, 19:14 , 19:51 Koufakis v. Carvel , 425 F.2d 892, 902 (2nd Cir. 1970), §20:91 Kumho Tire Ltd. v. Carmichael , 526 U.S. 137 (1999), §7:21 L LaMasa v. Bachman, 2005 WL 1364515 (N.Y.Sup. 2005), §21......