Record Data Intern., Inc. v. Nichols

• Decision Date: 21 December 1979
• Citation: 381 So.2d 1
• Parties: RECORD DATA INTERNATIONAL, INC., et al. v. Robert Clinton NICHOLS, etc., et al. 78-191.
• Court: Alabama Supreme Court

Page 1

381 So.2d 1

RECORD DATA INTERNATIONAL, INC., et al. v. Robert Clinton NICHOLS, etc., et al.

78-191.

Supreme Court of Alabama.

Dec. 21, 1979.

Rehearing Denied March 7, 1980.

John A. Pickens, Woodrow W. Vaughan, Jr. of Kidd, Pickens & Tate, Atlanta, Ga., William F. Murray, Jr. of Thomas, Taliaferro, Forman, Burr & Murray, Birmingham, for appellants.

J. H. Crow, III, Birmingham, for appellees.

PER CURIAM.

This an appeal from a jury verdict in favor of Robert Nichols' estate and Legal Messenger Service of Ala., Inc., appellees, against Record Data International, Inc., and Record Data, Inc., appellants. Appellants contend that the trial court committed numerous errors at trial and that the verdict was excessive. We affirm.

Record Data International, Inc., (RDI) and Record Data, Inc., RDI's parent corporation, are in the business nationwide of searching and verifying official court documents. The information collected is sold to various clients, of whom the majority are apparently lending institutions. RDI entered into a franchise agreement with Robert Nichols. There is a dispute about the parties to the agreement. RDI says it entered into the agreement solely with Robert Nichols, individually. Nichols' estate contends that the parties were RDI, Robert Nichols, and Legal Messenger Service of Alabama, Inc., a corporation which Nichols formed.

Nichols became ill and RDI sent people into Alabama to run Nichols' business, allegedly to help the Alabama office, which, according to RDI, was in a chaotic condition. Nichols subsequently died as a result of his illness. RDI then took over the operation of the Alabama business, contending that the takeover was proper under the franchise agreement because the agreement called for termination and return of various items to RDI upon the death of Nichols.

Appellees then commenced suit against RDI alleging fraud, violation of common law copyright, interference with contracts, breach of the franchise agreement, willful trespass, and conversion. All the causes of action, except breach of contract, sought punitive damages. The issues were tried and a verdict was returned in favor of the Nichols estate and Legal Messenger Service of Ala., Inc. for $225,000.

Appellants first contend that the trial court erred in admitting into evidence a schedule showing the consolidated tax returns on the grounds that the admission of the schedule showed Record Data, Inc.'s wealth to the jury, contrary to established Alabama law, citing Southern Life & Health Insurance Co. v. Whitman, 358 So.2d 1025 (Ala.1978).

In Southern Life the defendant's financial position was admitted over defendant's objection for the express purpose of aiding the jury in its assessment of punitive damages. This court noted its long standing rule that evidence of the defendant's wealth is highly prejudicial and, therefore, inadmissible. Southern Life, supra at 1026. However, Southern Life is distinguishable from the case at bar. First, there was a timely objection in Southern Life. In the case at bar there was no objection when appellee's attorney asked for a specific dollar amount of the gross receipts of certain subsidiaries, viz.:

"Q. What was the highest gross sales figure for any subsidiary that your company had in the year '73, '74? What branch?

"MR. WEAVER: Judge, we're going to object to that in that it has no bearing and no relationship to this case nor this Alabama operation and is in no way affected or influenced by anything that's subject to this lawsuit.

"THE COURT: In relation to the question of value I overrule."

"Q. Which branch had the highest gross receipts in that particular time period?

"A. Georgia.

"Q. And how much were their gross receipts?

"A. $241,242.00.

"Q. What was the next highest gross receipts subsidiary that you see there, please, sir?

"MR. WEAVER: We object . . . on the same grounds.

"THE COURT: Overruled."

"Q. You're talking about Record Data of Alabama across the street here; is that the one?

"A. Yes.

"Q. How much was that figure?

"A. $9,060.00."

As the record clearly shows, no objection was interposed when the witness was asked for specific dollar figures of gross receipts. It is our well-settled rule that a party who fails to object to matters at the trial level may not raise these matters for the first time as the basis for an appeal. Costarides v. Miller, 374 So.2d 1335, 1337 (Ala.1979). An objection must be made and a ground stated therefor or the objection and error are deemed to have been waived. Constarides, supra.

Southern Life is additionally distinguishable from the case at bar in that the evidence in Southern Life was introduced expressly to aid the jury in its determination of punitive damages. In the case at bar, the evidence was properly introduced to impeach the prior testimony of a defense witness, Bruce Felder, concerning the value of the Alabama business taken over by the defendants. It was appellants' contention the business was worth little, if anything; the appellees have contended the business was worth a great deal.

In this respect, the facts in the case at bar are more closely in point with Cities Service Oil Co. v. Griffin, 357 So.2d 333 (Ala.1978). In Cities Service the appellant contended that the trial court committed reversible error when it permitted plaintiff's counsel to elicit from the defendant's witness Moore, upon cross-examination, evidence of Citgo's 1975 gross sales and 1970 net profit. Moore had testified extensively on direct examination and "had painted a verbal portrait of the company's poor business position." Cities Service, supra at 343. In affirming the trial court's ruling admitting the evidence on cross-examination, the court held, "(B)ecause Moore had painted a verbal portrait of the company's poor business position, we fail to see how any undue prejudice resulted to it when evidence of its gross sales and net profits were elicited from the same witness." Cities Service, supra at 343.

In the case at bar, Mr. Felder had testified, in response to a question as to "the amount that this business (the Alabama business) would be worth," that, "It's obviously a deficit situation." In addition, Felder testified, when asked for a specific dollar amount of the value of the Alabama business, "We have offered eighteen hundred as payment for the fixed assets."

In its order denying appellants' motion for a new trial, the trial court held:

"The Court is of the opinion that the information contained in defendants' consolidated federal income tax return was relevant to the issues presented in this case. . . . (T)he federal income tax return disclosed the revenues being received from the operation of the Alabama franchise and, therefore, provided relevant evidence as to the value of the Alabama franchise." (Emphasis supplied.)

We cannot say that the trial court erred in this respect.

Moreover, when appellees' attorney offered to introduce copies of the schedules, only a general objection was entered. Again, this fact is closely parallel to Cities Service, where appellant's attorney made only a general objection to the proffered evidence. The court held there, and its holding is equally applicable here, "We have shown that this evidence was admissible, hence the general objection was insufficient for the purposes of appeal." Cities Service, supra at 343.

Appellants next contend that the trial court erred in permitting Record Data, Inc., to be added as a defendant while trial was in progress. Appellants contend that the court should have submitted the issue of whether Record Data, Inc., was a proper defendant under a theory of either alter ego, piercing the corporate veil, or corporation by estoppel to the jury as a fact question. We cannot agree with this contention. In its order denying appellants' motion for new trial, the trial court held:

"Although the Court had previously ordered the defendants to produce their federal income tax returns, the same were not produced until the trial of this cause had already begun. Examination of the consolidated federal income tax return indicated that the parent company was designated as Record Data, Inc., a corporation, and that this corporation in turn controlled a number of subsidiary corporations, one of which was designated as Record Data International, Inc., a corporation. . . . Bruce B. Felder was president and in control of all the corporations . . . and it was he who authorized and directed the conduct made the basis of the plaintiffs' claims. In view of the fact that the plaintiffs had been unable to ascertain the name and designation of the parent corporation until after the trial had begun, this Court under Rule 15(b) of the Alabama Rules of Civil Procedure amended the complaint to add Record Data, Inc., a corporation, as party defendant."

Since the adoption of the Rules of Civil Procedure, we have said that amendments should be freely allowed and that trial judges must be given discretion to allow or refuse amendments. Stead v. Blue Cross-Blue Shield, 294 Ala. 3, 310 So.2d 469 (1975). The trial judge should allow a proposed amendment if it is necessary for a full determination on the merits and if it does not unduly prejudice the opposing party or unduly delay the trial. Huskey v. W. B. Goodwyn Co., 295 Ala. 1, 321 So.2d 645 (1975). We cannot say here that the trial court abused its discretion in permitting Record Data, Inc., to be joined as a party defendant. Moreover, appellants made no objection when appellees moved to amend the complaint; they cannot now contend on appeal that allowing the amendment was error. Costarides, supra. The appellants also entered no objection to the trial court's oral charges to the jury, wherein the court submitted to the jury the question as to whether Record Data, Inc., and RDI were liable to the plaintiffs. If appellants were not satisfied with the court's charges as given, and wanted an instruction concerning the theories of alter ego,...