Moore v. Missouri-Nebraska Exp., Inc.
| Decision Date | 13 December 1994 |
| Docket Number | MISSOURI-NEBRASKA |
| Citation | 892 S.W.2d 696 |
| Parties | Bob MOORE, et al., Appellant-Respondent, v.EXPRESS, INC., Respondent-Appellant. WD 47753. |
| Court | Missouri Court of Appeals |
R. Dan Boulware, St. Joseph, for appellant-respondent.
Stephen James Briggs, St. Joseph, for respondent-appellant.
Before ULRICH, P.J., and LOWENSTEIN and HANNA, JJ.
This case involves a long trial, the sustaining of a petition for a writ of prohibition 1 and this appeal, all stemming from a business relationship that went sour. A jury brought back verdicts on the plaintiffs' breach of contract and fraud claims, plus a substantial punitive award which was remitted in amount. Both sides have appealed. An overview of the facts is first in order. Four persons, Moore, Buttoroff, Nicholas and Bowlin (Owners), owned large over-the-road truck units. These four persons will be referred to as the Owners. Starting in 1979, the Owners, using all the same terms and format, leased a combined total of twenty-nine of their trucks to a trucking company, the defendant, Missouri-Nebraska Express, Inc. (Truck Lines). By 1983, all 197 trucks utilized by Truck Lines were leased. It should be noted there were up to forty individuals or entities which leased trucks to Truck Lines, but only four of them are plaintiffs in this suit.
The leases provided the Owners would be paid by the mile for any truck usage by Truck Lines. Owners were to supply the drivers and pay fuel costs. The compensation rate per mile to Owners was geared to fluctuating changes in fuel costs, so the rate of return to Owners was not to be affected by fuel price increases or decreases. Several years into this business relationship, in approximately December, 1985, Truck Lines worked out an arrangement with a particular fuel company, Union 76, that if all of Truck Lines' fuel business were given to some fifty-five Union 76 stations nationwide, the drivers would be supplied credit cards and, in return for giving the gas stations all its business, Truck Lines, or in this case, Owners, would get a cash price instead of a higher credit price (often a five cent spread).
Truck Lines went to the individual Owners who were responsible for the fuel costs and obtained Owners' approval of the deal with Union 76. One of the fact issues before the jury was the allegation that Owners had no choice but to approve the agreement; for if they did not, they were afraid Truck Lines would cancel their leases. Unknown to Owners, Truck Lines received a cash "rebate" or, "volume discount," directly from Union 76, or from the individual stations. This rebate was for all purchases for Truck Lines' business (whether leased or owned vehicles) and sometimes amounted to more per gallon than the credit-cash differential. There was a variance in the evidence whether the Owners knew or should have known of this cash payment to Truck Lines based on fuel usage, which payments went to Truck Lines until the leases were eventually terminated on October 1, 1988, by Truck Lines. These rebates formed one count for which total actual damages of $121,159 were claimed by the plaintiff-Owners. This count was submitted on the alternate theories of breach of contract, fraud and fraudulent non-disclosure, and while the jury returned verdicts for $121,159 on the three verdict forms, the judge entered but one judgment. This conduct of the defendants also formed the basis for punitive damages.
The jury awarded the four Owners a total of $4.2 million in punitive damages. The trial court sustained a remittitur on the punitive award and entered a total punitive judgment of $350,000. That action forms the basis of Owners' appeal which will be dealt with in Part III (remittitur) of this opinion.
The other submission was on a claim that Truck Lines had misled Owners about changing the effect of termination of the leases, causing them $59,920 in damages. The theory was Truck Lines promised to amend the leases, breached that promise, and the Owners relied on that promise to their detriment. Evidence favorable to the plaintiffs' verdict on this count was to the effect Truck Lines had proposed an amendment to the basic lease which called for a 365 day notice to be given by Truck Lines. However, if they canceled with less notice, Truck Lines would pay Owners $10 a day for each day less than 365 for which notice was given. There had been a concern among Owners regarding the growth of Truck Lines' company owned fleet, and their leases would suddenly be terminated. Evidence favorable to the verdict showed Truck Lines had for several years planned to terminate the truck leases and replace the vehicles with its own. While Truck Lines was reducing the number of vehicles leased from Owners to zero, and meanwhile building up its own company fleet, it was promising Owners to renegotiate the lease termination clauses, which it never did then terminated on terms unfavorable to Owners.
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CHRONOLOGY
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1979"1983 1984 1985 1986 1988 1989 1991
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Owners start Lines begins Lines Fuel program October--Lines March--Termination September--Fraud
leasing program to promotes and notice to effective. Fraud on on rebates count
total of 29 own fleet. change to rebates terminate. rebates discovered added by Owners
trucks to (See Below) 76 fuel begin
Truck purchases
Lines
June--Owners suit on
wrongful termination
filed.
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12/31/83 12/31/94 12/28/85 1/3/87 12/31/88
Leased 197 Leased 227 Leased 280 Leased 73 Leased 46 Leased 1
Owned 0 Owned 60 Owned 131 Owned 515 Owned 675 Owned 756
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Since both sides have appealed, under Rule 84.04(j), Owners, as plaintiffs, are deemed the appellants here. Nevertheless, for purposes of presenting this rather involved appeal, the defendant Truck Lines' points on appeal will be taken up first and are located in parts I (Wrongful Termination) and II (Rebates) of this opinion. Part III is Owners' appeal on remittitur.
Truck Lines has raised eleven points in its appeal. Only Truck Lines' final point deals with the wrongful termination count. Again, for ease in presentation, this point will be taken up first along with pertinent facts. Additional facts relating to the multitude of points dealing with Truck Lines' fraud with regard to the rebates, will be set out in the discussion of those remaining points in part II.
In early 1987, Owners were getting nervous about the fact Truck Lines' fleet was growing so large, and Owners felt Truck Lines was going to cancel their leases. The leases contained a cancellation provision calling for a 30 day notice before cancellation. Truck Lines was afraid Owners, feeling insecure about the continuation of the leases, would first terminate and seek to lease elsewhere. This would have left Truck Lines without sufficient trucks for a period of time. So, the evidence showed Truck Lines, at a meeting in January 1987, and in order to make the Owners feel comfortable, presented a lease amendment to Owners which increased the notice required by Truck Lines from 30 to 365 days and added a penalty of $10 a day per truck for each day less than the full 365 days notice. Owners' notice requirement was to be increased to 120 days with a maximum penalty of $2,000 for early cancellation. Then, at a meeting in March of the same year, Owners requested amendment language which would waive any penalty for them in case of their bankruptcy. Additionally, the evidence showed they insisted, and Truck Lines agreed to all these changes. Finally, it was agreed that Truck Lines agreed to all these changes, and that Truck Lines was supposed to draft the amendments and send these amendments to the individual Owners to be signed. Two of the plaintiff Owners were not present at the meeting. Two testified they never received the amendments. Two received amendments but not the agreed upon language as to a bankruptcy provision. None of the four signed.
Needless to say, the evidence, some of which came from the testimony of a Truck Lines' official, was that these amendments which were favorable to Owners, were never going to become part of the lease. The only purpose Truck Lines had floating them to the Owners was to...
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