Refuse & Environmental Systems, Inc. v. Industrial Services of America, Inc.

• Decision Date: 08 February 1991
• Docket Number: No. 90-1489,90-1489
• Citation: 932 F.2d 37
• Parties: 1991-1 Trade Cases 69,418 REFUSE & ENVIRONMENTAL SYSTEMS, INC. and Richard V. Bisesti, Plaintiffs, Appellees, v. INDUSTRIAL SERVICES OF AMERICA, INC. d/b/a Computerized Waste Systems, Inc., et al., Defendants, Appellees, Joseph Freedman, Defendant, Appellant. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 37

932 F.2d 37

1991-1 Trade Cases 69,418

REFUSE & ENVIRONMENTAL SYSTEMS, INC. and Richard V. Bisesti Plaintiffs, Appellees, v. INDUSTRIAL SERVICES OF AMERICA, INC. d/b/a Computerized Waste Systems, Inc., et al., Defendants, Appellees Joseph Freedman, Defendant, Appellant.

No. 90-1489.

United States Court of Appeals, First Circuit.

Heard Feb. 8, 1991.

Decided April 29, 1991.

Kimberly Homan with whom Zalkind, Sheketoff, Wilson, Homan, Rodriguez & Lunt, Boston, Mass., Eliot B. Gersten and Gersten & Clifford, Hartford, Conn., were on brief, for appellant.

George F. Kelly with whom Ryan & White, Springfield, Mass., and John J. Pribish, New Brunswick, N.J., were on brief, for appellees.

Before TORRUELLA, Circuit Judge, ALDRICH and BOWNES, Senior Circuit Judges.

BOWNES, Senior Circuit Judge.

This is an appeal by defendant-appellant Joseph Freedman from adverse jury verdicts and court findings. 732 F.Supp. 1209. The roots of the case go back to 1975 when Freedman and two other individuals formed a company known as Waste Marketing Systems, Inc., a business which provided centralized, computerized waste management services for department store chains. Several years later the company was sold and renamed Computerized Waste Systems, Inc. ("CWS"). After the sale Freedman retained partial ownership of the company.

Richard V. Bisesti, one of the plaintiffs-appellees in this action, worked for the company from 1975 until 1985, when he and co-workers Linda Pearson and Jack Singletary formed their own waste management company, Refuse & Environmental Systems, Inc. ("R & E"), the other plaintiff-appellee. When CWS began losing clients to R & E, CWS officers Freedman, Harry Kletter, and Paul Burke decided to sue R & E, Bisesti, and Singletary. The complaint alleged breach of employment agreements involving trade secrets, breach of fiduciary duties, and unlawful inducement of breach of contract. The lawsuit had its intended effect. Potential clients who had learned of the suit decided not to do business with R & E.

R & E and Bisesti then sued CWS, Freedman, Kletter, Burke, and others in the United States District Court for the District of Massachusetts for slander, abuse of process, interference with prospective economic gain and contractual relations, federal antitrust violations, and violation of Massachusetts General Law chapter 93A, Sec. 2. The case proceeded to trial against CWS, Freedman, Kletter, and Burke, the other defendants having been dismissed. The district court assumed subject matter jurisdiction over the action pursuant to 28 U.S.C. Secs. 1331, 1337, and 15 U.S.C. Sec. 15 (antitrust), and pendent jurisdiction over the related state claims. See United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966).

Burke was found not liable. The jury found CWS liable on the antitrust count and the count for interference with R & E's prospective economic gain and contractual relations. It found Kletter and Freedman each liable for slander and abuse of process. After the jury trial the court found Kletter and Freedman liable under the Massachusetts Consumer Protection Act, Mass.Gen.L. ch. 93A, Sec. 2. Plaintiffs were awarded attorney's fees and costs by the court pursuant to 15 U.S.C. Sec. 15 and Mass.Gen.L. ch. 93A, Sec. 11.

Freedman makes the following claims on appeal: the court erroneously denied his motion for directed verdict and motion for judgment notwithstanding the verdict as to the slander and abuse of process counts; the jury's award for slander was excessive; the damages awarded under Mass.Gen.L. ch. 93A, Sec. 11 were improperly cumulative and lacked evidentiary support; and the award of attorney's fees and costs was improper. Kletter has appealed separately; his appeal is not before us.

I. Slander

In considering an appeal from the denial of motions for directed verdict and judgment n.o.v., we "view all the evidence in the light most favorable to the plaintiff, and draw all reasonable inferences in the plaintiff's favor." Payton v. Abbott Labs, 780 F.2d 147, 156 (1st Cir.1985). Having done so, we find no evidence to support the slander verdict against Freedman. Witnesses testified that Kletter, but not Freedman, told R & E's business colleagues and potential customers that Bisesti was a crook and that a lawsuit was being filed against R & E. Nowhere in the record is there any evidence that Freedman personally made slanderous statements about Bisesti, nor did the plaintiffs try to prove the same. The most the record shows is that Freedman helped to coordinate the state lawsuit. Although we have found no cases directly on point, it seems beyond cavil that in order for a defendant to be found individually liable for slander, the defendant must have personally made a slanderous statement about the plaintiff.

The case was tried on two alternative theories of liability: individual, and joint and several. In arriving at its slander verdict, the jury answered a set of special interrogatories: It found Freedman liable for slander; it assessed damages against him individually in the amount of $100,000; it also found the non-appealing defendant Kletter liable and assessed damages against him individually in the amount of $100,000. It found defendants CWS and Burke not liable for slander. The jury explicitly found that none of the defendants were jointly and severally liable for slander. A copy of the interrogatories and the jury's answers thereto are in an appendix to this opinion.

The court instructed the jury that if they found joint and several liability on the various counts, damages should be assessed jointly and severally. The core of the instruction was as follows:

Where two or more persons unite in an act which constitutes a wrong to another, intending at the time to commit it, or performing it on the circumstances which fairly charge them with intending the consequences which follow, they incur a joint and severable [sic] liability for the acts of each and all of the joint participants.

The law does not require the injured party to establish how much of the injury was done by one person and how much of an injury was done by another. Rather, [it] permits the injured party to treat all concerned in the injury jointly, and all are liable to respond to the plaintiff in the total sum you find to be damages.

During deliberations, the jury asked the judge if the question on joint and several liability had to be answered if they found damages against CWS. The judge answered:

You only have to decide between joint and several or individual liability if you found that more than one defendant is liable in the first part of the question.... [Y]ou have to make a choice as to whether you wish to find damages against that particular individual defendant, or defendants, or joint and several liability, which means it's against all those that you find responsible for whatever the count may be.

Both instructions were clear and correct. ¹

A basic premise of our jury system is that the jury follows the court's instructions. "We must assume that juries follow instructions." de Feliciano v. de Jesus, 873 F.2d 447, 451 (1st Cir.) (citing Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585, 604, 105 S.Ct. 2847, 2858, 86 L.Ed.2d 467 (1985)), cert. denied, --- U.S. ----, 110 S.Ct. 148, 107 L.Ed.2d 107 (1989).

The trial judge upheld the verdict over the objection of defendant that it lacked any evidentiary foundation. He did so on the theory that Freedman had engaged in a common plan to slander Bisesti:

A jury could infer from this testimony that Freedman helped to coordinate the baseless state court lawsuit against Bisesti and R & E; that he was instrumental in furthering a scheme to defame Bisesti by instigating the lawsuit; that he could reasonably foresee or did in fact intend that false and harmful words regarding plaintiffs be communicated to the waste services business community via CWS agents and shareholders. In short, because Freedman could reasonably have been understood by the jury to have played a key role in a common plan to slander plaintiff, defendant's motion for judgment n.o.v. is denied.

This analysis can only mean that the judge thought Freedman was jointly and severally liable with Kletter. The evidence certainly could have been viewed as the judge stated. But the jury did not so view it; it found the defendant individually liable and not jointly and severally liable. The court could not re-write the jury's answers to the interrogatories because of the lack of evidence for a finding of individual liability.

The plaintiffs argue that the judge properly "harmonized" inconsistent answers to interrogatories to reach a logical conclusion. We are well aware that " '[w]here there is a view of the case that makes the jury's answers to special interrogatories consistent, they must be resolved that way.' " Gallick v. Baltimore & Ohio R.R. Co., 372 U.S. 108, 119, 83 S.Ct. 659, 666, 9 L.Ed.2d 618 (1963), quoting Atlantic & Gulf Stevedores, Inc. v. Ellerman Lines, Ltd., 369 U.S. 355, 364, 82 S.Ct. 780, 786, 7 L.Ed.2d 798 (1962). See also Insurance Co. of North America v. Musa, 785 F.2d 370, 377 (1st Cir.1986); Mashpee Tribe v. New Seabury Corp., 592 F.2d 575, 590 (1st Cir.), cert. denied, 444 U.S. 866, 100 S.Ct. 138, 62 L.Ed.2d 90 (1979). But here there were no inconsistent answers to be resolved. The answers were consistent with each other and with the finding of individual liability. The only "inconsistency" was between the $100,000 slander judgment against Freedman and the lack of evidence to support it. The remedy was either a directed verdict or a judgment notwithstanding the verdict.

The plaintiffs also contend that Freedman failed to preserve for appeal the trial court's rulings on the motions for directed verdict and judgment n.o.v. We disagree. A motion for directed verdict must state the "specific grounds therefor." Fed.R.Civ.P. 50(a). The motion must be made...