Mercer v. Davis & Berryman Intern., Inc.

• Decision Date: 21 December 1987
• Docket Number: No. 86-7851,86-7851
• Citation: 834 F.2d 922
• Parties: Mike MERCER, d/b/a Food Projects Consultants, a sole proprietorship with its principal place of business in the United Kingdom, Plaintiff-Counterclaim defendant-Appellee, v. DAVIS & BERRYMAN INTERNATIONAL, INC., a corporation incorporated under the laws of the State of Alabama, and Roy Davis, Defendants-Counterclaim plaintiffs-Appellants.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 922

834 F.2d 922

Mike MERCER, d/b/a Food Projects Consultants, a sole proprietorship with its principal place of business in the United Kingdom Plaintiff-Counterclaim defendant-Appellee, v. DAVIS & BERRYMAN INTERNATIONAL, INC., a corporation incorporated under the laws of the State of Alabama, and Roy Davis Defendants-Counterclaim plaintiffs-Appellants.

No. 86-7851.

United States Court of Appeals Eleventh Circuit.

Dec. 21, 1987.

Eddie Beason, Fine & Associates, Russellville, Ala., for defendants-counterclaim defendant-appellee.

Dennis G. Pantazis, Gordon, Silberman, Wiggins & Childs, P.C., Birmingham, Ala., for plaintiff-counterclaim defendant-appellee.

Appeal from the United States District Court for the Northern District of Alabama.

Before JOHNSON and CLARK, Circuit Judges, and EATON ^*, Senior District Judge.

CLARK, Circuit Judge:

This appeal results from judgments against Davis & Berryman International, Inc. ("D & B") and Roy Davis, D & B's president, in a diversity action brought by Mike Mercer, a British citizen, doing business as Food Projects Consultants ("FPC"). A jury initially awarded Mercer $160,000 plus interest on his breach of contract claim against D & B, and a total of $216,333--$75,000 in compensatory damages and $141,333 in punitive damages--on his fraud claim against Davis. The district court, however, deemed the punitive damages award excessive, and conditioned its grant of a new trial on Mercer's acceptance of a reduced punitive damages award of $25,000. Mercer rejected the remittitur and on retrial of the punitive damages issue, the jury awarded him $75,000. The appellants raise objections to various rulings at both trials. We affirm the judgments in every respect but the $75,000 compensatory damage award for Davis' fraud.

Mercer's business, FPC, is essentially a consulting firm hired to help foreign organizations develop major food projects. Record, Vol. 2 at 79. In early 1982, Mercer began work on two such projects, both in Nigeria, one involving a Dr. Dapo Tejuoso and the other a Chief Olushola Afolabi. Both Tejuoso and Afolabi were interested in expanding and modernizing their poultry farms, and Mercer presented them with feasibility studies suggesting for each a three-stage plan of expansion. Id. at 88-90. Soon thereafter, Mercer entered into consultancy agreements with Tejuoso and Alfolabi, each agreement providing for a $175,000 consulting fee. Id. at 89, 91.

The first stage of each project was to be the erection of several poultry houses and the installation of certain equipment. FPC was responsible for selecting the suppliers of the houses and equipment. Plaintiff's Exh. 2, at 3, 11. In connection with this responsibility, Mercer began discussions with Roy Davis to see if Davis' company, at that time called Strickland & Davis ("S & D"), would be interested in supplying the projects. In the course of those negotiations, Mercer testified, he and Davis went over the costs of the projects and Mercer gave Davis a cost "breakdown" that reflected FPC's $175,000 fee. Record, Vol. 2 at 94-95. According to Mercer, it was clear to both parties and, for that matter, Tejuoso, that the bulk of the consulting fees would have to come from loans Davis would arrange in the United States to finance the project. Id. at 95-96. Davis ultimately agreed to take the projects on. Id. at 91.

On October 28, 1982, apparently to confirm S & D's participation in the projects and his own fee arrangement, Mercer sent Davis a telex including the following paragraph.

4. If we arrange for down payment of 270,000 USD to First National Bank, we must ask for your confirmation by return telex, for our bankers, that 175,000 USD per contract will be cable transferred by S and D to:

National Westminster Bank PLC

St. Johns Road Branch

Tunbridge Wells, Kent, England

For the account of Food Projects Consultants. This to cover initial commission agreed to be paid in UK on completion of documentation and deposit receipt, plus portion of consultancy fees agreed with client to be funded from first loan--We can then sort out rest after shipment.

I must show client this telex prior to effecting all documentation.

Record, Vol. 2 at 96, 98-99; Plaintiff's Exh. 3. Mercer testified that his use of the term "documentation" referred to the contracts between S & D and Tejuoso and Afolabi; Davis testified that the term included promissory notes from the Nigerians. Davis responded by telex the same day. His fourth paragraph read as follows.

4. We hereby confirm that upon receipt of downpayment(s) of 270,000 U.S. dollars as received from each poultry project as contract agreement for Nigerian projects. S + D International will, transfer by cable the sum of 175,000 U.S. dollars (for consultant fee's [sic] to the account of:

Food Projects Consultants

National Westminster Bank PLC

St. Johns Road Branch

Tunbridge Wells, Kent, England

It is understood that S + D Intl will receive invoice statement from Food Project Consultants for above amount.

Record, Vol. 2 at 97, 104; Plaintiff's Exh. 4. On October 29, 1982, FPC sent S & D two invoices for the fees. Record, Vol. 2 at 108-09; Plaintiff's Exhs. 5, 6.

On January 19, 1983, Afolabi executed a contract with S & D, and in September of 1983, the firm received Afolabi's $270,000 down payment. Record, Vol. 2 at 116, 121. From October, 1983 until January, 1984, in four installments, S & D paid Mercer $175,000. Id. at 121. (During this time S & D became D & B. Id. at 126; Plaintiff's Exh. 9.) The Tejuoso deal took somewhat longer to get started. Although Tejuoso signed the contract on November 28, 1982, D & B did not receive the down payment until January of 1984. Record, Vol. 2 at 113, 123.

Mercer and Davis met that same month, January 1984, in Davis' Russellville, Alabama offices. Mercer testified that because D & B had not yet paid FPC's fees on the Tejuoso project, he asked Davis for a letter of credit payable to FPC. According to Mercer, Davis seemed to accept this but suggested that $75,000 that he would pay Mercer immediately be left off the letter. Id. at 131-32. Davis did not, however, pay the $75,000 right away; he instead told Mercer that if he would meet him in Nigeria to work out some details, he would be paid there. Id. at 132-33.

Soon thereafter, Mercer and Davis traveled to Nigeria. On February 8, the day Davis was returning to the United States, Davis gave Mercer a $75,000 check made out to Food Projects Consultants. Id. at 133, 135. The check was admitted into evidence, see Plaintiff's Exh. 11, but the parties disagreed sharply about the events surrounding its exchange. According to Mercer, the check was dated February 8 and Davis put no conditions on it other than to ask that it not be cashed until the end of the month. Record, Vol. 2 at 133-34. Mercer deposited the check on February 29, but on March 1, Davis sent Mercer a telex indicating that he had stopped payment on the check. Defendant's Exh. 6.

According to Davis, the check was postdated February 18 (the 1 had been rubbed off, he testified) and Mercer had asked him for it simply to have credibility in telling Tejuoso that foreign exchange was available. Tejuoso had still not signed the promissory note needed to obtain financing, Davis said, and Mercer thought he might use the check for leverage to get Tejuoso's signature. Record, Vol. 2 at 267-69. Davis also testified at trial that he would have let Mercer keep the check had the promissory note been signed. Id. at 269. In his pretrial deposition, however, Davis had said that he intended to stop payment on it "no matter what happened." Id. at 271-72.

In any event, Davis never offered a replacement check and FPC was paid nothing further until June 1984. Id. at 130. At that time, according to Mercer, Tejuoso learned that FPC had not been paid and isntructed Davis to wire Mercer $15,000, which Davis did, reducing the amount owed FPC to $160,000. Id. at 145. Davis testified that he wired the money strictly for Tejuoso's use and denied that it was a payment on any contract. Id. at 285.

On December 26, 1984, after receiving no further payment, Mercer filed suit seeking damages from D & B for breach of the contract formed by the telexes and from Roy Davis individually for his allegedly fraudulent tender of the $75,000 check. D & B answered that either there was no contract or if there was, one of its terms was the delivery of the promissory notes on both contracts. Davis argued that the check had never been intended as a payment to Mercer. After a trial at which only Mercer and Davis testified, the jury returned verdicts against both appellants, and the district court denied motions by both for directed verdicts and judgments notwithstanding the verdicts. Davis' motion for new trial was granted only with respect to punitive damages and only after Mercer refused to remit $116,333 of his $141,333 punitive damages award. On the retrial of the punitive damages issues, Mercer was awarded $75,000.

I. Sufficiency of the Evidence

Appellants both contend that the district court erred by not granting them judgments as a matter of law. On reviewing whether a motion for directed verdict or judgment notwithstanding the verdict should have been granted, we must both examine the evidence in the light and draw all reasonable inferences most favorable to the party opposing the motion. Boeing Co. v. Shipman, 411 F.2d 365, 374-75 (5th Cir.1969) (en banc). Having done so, we find that appellants' contentions border on the frivolous.

A. The Breach of Contract Claim

Although D & B chose to insist that there could not be a separate contract between D & B and Mercer because Mercer was at all times Tejuoso's agent, there is no legal principle per se precluding overlapping contracts, and that is apparently precisely what the jury found. ¹ It is true that, under Alabama law, consideration will not be found from something the promisee was already legally bound to do. See ...