Moreau v. Oppenheim

• Decision Date: 02 December 1981
• Docket Number: 81-2279,ALDURO-RAYNES,Nos. 81-2159,s. 81-2159
• Citation: 663 F.2d 1300
• Parties: Jacques MOREAU, et al., Plaintiffs-Appellees, v. Egon OPPENHEIM, et al., Defendants-Appellants, v. Virginia H. ZIMMERMAN, Intervenor-Appellee.ARABIANS, INC., Plaintiff-Appellant, v. Jacques MOREAU, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1300

663 F.2d 1300

Jacques MOREAU, et al., Plaintiffs-Appellees, v. Egon OPPENHEIM, et al., Defendants-Appellants, v. Virginia H. ZIMMERMAN, Intervenor-Appellee.

ALDURO-RAYNES ARABIANS, INC., Plaintiff-Appellant, v. Jacques MOREAU, et al., Defendants-Appellees.

Nos. 81-2159, 81-2279.

United States Court of Appeals Fifth Circuit.

Dec. 2, 1981.

Joe A. Izen, Jr., Houston, Tex., for Raynes Arabians.

L. T. Bradt, Spring, Tex., for Oppenheim in No. 81-2159, and for defendants-appellants in No. 81-2279.

William Pannill, Houston, Tex., for plaintiffs-appellees in No. 81-2159.

James L. Walker, Houston, Tex., for intervenor-appellee.

Reynolds, Allen, Cook, Pannill & Hooper, Houston, Tex., for plaintiffs-appellees in No. 81-2279.

John O. Tyler, Jr., for plaintiffs-appellees in both cases.

Appeals from the United States District Court for the Southern District of Texas.

Before GEE and RUBIN, Circuit Judges, and SPEARS, ^* District Judge.

GEE, Circuit Judge:

This case turns on the construction of a series of transactions between the Oppenheims, American owners of a horse-breeding operation in Texas, and the Moreaus, French citizens formerly engaged in the breeding of pureblood Arabian horses in southern France. The central question at trial was whether the Moreaus had been the victims of a scheme involving malicious overreaching or whether they had simply backed out of a contract that had gone sour. As might be expected, the parties' descriptions, both at trial and on appeal, of the terms of the agreements at issue vary considerably.

According to the Moreaus' version, they were approached by the Oppenheims with a proposal whereby the Oppenheims would obtain the use of the Moreaus' horses while the Moreaus would retain ownership. In furtherance of this, the parties entered into a "joint venture." A 1979 Memorandum of Understanding between the parties provided, in two language transcriptions that differed in material content, for the formation of a corporation. By the French transcription, the Moreaus and the Oppenheims would each contribute $30,000, the parties would have equal voting and nonvoting stock, and in no event would stock be issued to any party prior to the Moreaus' arrival in the United States to stay. The English version of the memorandum, unbeknownst to the Moreaus-who allegedly could not read English and who relied on the Oppenheims for interpretation of the documents-provided for the corporation's formation within sixty days and contained other material variations from the French one. The Oppenheims represented to them, the Moreaus testified at trial, that various contractual provisions contained in both transcriptions, including a provision in the memorandum that the horses would be sold to the corporation, would not be enforced but were needed for "immigration purposes." Alduro-Raynes Arabians, Inc. was incorporated on May 10, 1979. The parties were duly elected officers and directors. According to the Moreaus' testimony, the Oppenheims represented to them that no stock would be issued until each party paid $30,000 and in no case before the Moreaus arrived in the United States to stay. On October 19, 1979, however, the Oppenheims held a meeting of the shareholders, allegedly without notice to the Moreaus, at which the Moreaus were removed as directors and, at a subsequent directors' meeting, were removed as officers. The Moreaus then arrived in the United States with their eight horses. At a meeting between the parties on November 22, 1979, at the Oppenheims' farm, the Oppenheims demanded that the Moreaus sell Arbor, the Moreaus' prize stallion that had recently won the European championship, and the other horses to the corporation. When the Moreaus balked at this, the Oppenheims refused to permit the horses to be removed from their farm. The Oppenheims then terminated the Moreaus' formal employment by Alduro-Raynes and encouraged the immigration authorities to deport the Moreaus from the United States on the basis that they were now in violation of their entry visas.

The Oppenheims describe their agreement with the Moreaus as one to import the horses into the United States, where the horses, particularly the stallion Arbor, would be sold to Alduro-Raynes. They deny that they made any oral representations to the contrary concerning the sale of the horses. The Oppenheims further deny that the Moreaus relied on them for interpretation of their "arms-length" contract and assert that, because they were so anxious to leave France, the Moreaus were the first to propose the sale of the horses to the American corporation. According to the Oppenheims, the Moreaus were properly removed as directors and officers of Alduro-Raynes because, while the Oppenheims had deposited money with the corporation and had been properly issued shares, the Moreaus had not done anything to fulfill their part of the bargain by October 1979. The Oppenheims further deny that there was ever any intention to form a joint venture, assert that, while they composed the original draft of the agreements, the Moreaus drafted the final versions, and deny that there was ever any agreement prohibiting the issuance of stock before the Moreaus' arrival in the United States. Other factual assertions made by the Oppenheims at trial and on appeal are discussed, together with their legal arguments, below.

Alduro-Raynes first brought suit for damages and declaratory judgment in Texas state court, but this action was removed by the Moreaus to the Southern District of Texas and consolidated with the Moreaus' suit alleging fraud, breach of fiduciary duty, conversion, tortious interference with contract, and civil conspiracy. During the course of proceedings, one Zimmerman was appointed receiver of the horses. On December 7, 1979, an agreed injunction was entered, prohibiting any party from selling, transferring, or in any way attempting to change the ownership status of the horses pending further order of the United States district court. The suit proceeded to trial, the jury rendering a verdict on March 5, 1981, for the Moreaus on four of the five asserted causes of action-fraud, breach of fiduciary duty, conversion, and tortious interference with business and contractual relations-and assessing $50,000 in compensatory damages. The jury further found that the Oppenheims' actions were done willfully and intentionally or with callous and reckless indifference to the rights of the Moreaus but declined to award punitive damages. The district court entered judgment and assessed as costs the amount claimed by the receiver for the care of the animals and, in addition, attorneys' fees. The horses (except Arbor, who had died in April 1980) were released to the Moreaus in May 1981, but both before and after trial the Oppenheims contacted the Arabian Horse Registry of America in an effort to prohibit the registration of the horses in this country, thus successfully prohibiting the Moreaus from breeding their horses and selling the offspring.

This court granted a stay of the money damages of the judgment, along with expedited appeal. We referred the Moreaus' request for a post-judgment injunction to the district court, and on June 17, 1981, the trial court enjoined the Oppenheims from "attempting to prevent the Moreaus from registering their horses with the Arabian Horse Registry of America, Inc." and from initiating or facilitating deportation proceedings against the Moreaus. The Oppenheims here appeal from the March 23, 1981, judgment, as well as from the post-judgment relief granted, alleging numerous points of error in the proceedings in the district court. We affirm.

I. Sufficiency of the evidence.

The Oppenheims assert that the trial court erred in failing to hold that, "as a matter of law," the appellants were entitled to recover damages from the appellees for breach of contract and interference with business relations. This is a thinly disguised claim that there was an insufficient evidentiary basis for the jury's verdict. Appellants, however, do not show that they filed motions for either directed verdict or judgment notwithstanding the verdict, and thus our review is limited to recognition of plain error apparent on the face of the record. Wright & Miller, Federal Practice & Procedure: Civil § 2536 (1971); Little v. Bankers Life & Casualty Co., 426 F.2d 509, 511 (5th Cir. 1970).

Much of the evidence at trial presented the jury with credibility choices between witnesses. Our review of the trial record leaves us with little doubt that the jury verdict is untainted by plain error and is, to the contrary, supported by ample evidence. Repeatedly, the jury saw the trial testimony of the Oppenheims impeached by reference to their earlier deposition testimony. They heard Mrs. Oppenheim admit that she and her husband never had any intention of contributing $30,000 to Alduro-Raynes, as stipulated in the memorandum of understanding between the parties. ¹ Mr. Oppenheim testified that he mailed the Moreaus a notice of the directors' meeting (in which the Moreaus would be removed from the corporate board) only two days before the meeting was to be held, knowing full well that the letter would take a minimum of four days to reach the Moreaus abroad.

The jury also heard Mrs. Oppenheim apparently contradict her own trial testimony on an important issue. In brief, the central factual issue on which both the Moreaus' and the Oppenheims' contract claims turned was a simple one: did the contract provide and did the parties intend from the outset to have title to the horses transferred to the Alduro-Raynes corporation, or did the Oppenheims represent to the Moreaus that the horses were being formally conveyed to the corporation merely for "immigration purposes" and that the corporation would never own the horses. Although both Mr. and Mrs. Oppenheim early in the trial vehemently denied having made any such representation, Mrs. Oppenheim admitted on...