Special Promotions, Inc. v. Southwest Photos, Ltd., 77-1154

• Citation: 559 F.2d 430
• Decision Date: 19 September 1977
• Docket Number: No. 77-1154,77-1154
• Parties: SPECIAL PROMOTIONS, INC., Plaintiff-Appellee, v. SOUTHWEST PHOTOS, LTD., et al., Defendants, Fox-Stanley Photo Products, Inc., Defendant-Appellant. Summary Calendar. *
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 430

559 F.2d 430

SPECIAL PROMOTIONS, INC., Plaintiff-Appellee, v. SOUTHWEST PHOTOS, LTD., et al., Defendants, Fox-Stanley Photo Products, Inc., Defendant-Appellant.

No. 77-1154

Summary Calendar. ^*

United States Court of Appeals, Fifth Circuit.

Sept. 19, 1977.

A. W. Worthy, Moulton S. Dowler, Jr., San Antonio, Tex., for defendant-appellant.

Russell Nunnally, Ernest E. Figari, Jr., Dallas, Tex., for plaintiff-appellee.

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

Before THORNBERRY, RONEY and HILL, Circuit Judges.

THORNBERRY, Circuit Judge:

Appellant-defendant Fox-Stanley Photo Products, Inc. appeals from a $70,000 judgment, plus interest and attorneys' fees, in favor of appellee-plaintiff Special Promotions, Inc. We affirm that judgment.

Special Promotions, a Mississippi corporation engaged in the commercial photo finishing business, brought this diversity action for $140,805 against Fox-Stanley and Southwest Photos, Ltd. ¹ Southwest was engaged in the itinerant photography business, employing several photographers who traveled to various department stores and conducted "sittings" for customers. Special Promotions sold equipment and film to Southwest and performed its film processing and printing work, beginning in 1970. By 1972 Southwest was experiencing financial difficulties, and in March of that year Fox-Stanley officials began discussing with their Southwest counterparts the possibility of purchasing Southwest or providing it with much-needed capital. During this time Southwest was reorganized by its principals into Southwest Portraits, Inc., a Texas corporation.

In a memorandum to Fox-Stanley's board of directors, a company vice president indicated that Southwest "could be salvaged" and recommended that Fox-Stanley pour $45,000 into the troubled business in such a way as to minimize Fox-Stanley's exposure to Southwest's creditors yet enable Fox-Stanley to acquire Southwest if it became a profitable concern. This plan was followed. Fox-Stanley loaned the organizing stockholders of Southwest Portraits, Inc., $45,000, with which they purchased stock in Southwest. This stock was pledged as collateral for the loan, and Fox-Stanley retained an option to purchase the stock in return for cancellation of the loan note. Fox-Stanley made the loan on Nov. 2, 1972, and began providing bookkeeping and management advice to Southwest. Fox-Stanley then contacted Special Promotions to discuss that company's business relationship with Southwest. That relationship continued, and Special Promotions opened a $20,000 line of credit to Southwest after negotiations with Fox-Stanley officials.

By May, 1973, Fox-Stanley concluded that Southwest could not be saved and on May 27 severed its relationship with the company. In the months that followed, Special Promotions continued to do business with Southwest and extended the company additional credit. By the time Special Promotions terminated this arrangement, Southwest's account totalled more than $138,000 in unpaid invoices. This suit followed in June, 1974.

The jury found that Fox-Stanley and Southwest had entered into a joint venture from Nov. 2, 1972, until May 27, 1973, and also found that Fox-Stanley exercised control over Southwest during that period. Special Promotions was awarded $70,000 in damages, plus interest, and $26,000 in attorneys' fees (as well as an additional $10,000 in event of an appeal).

Appellant first challenges the judgment by raising several sufficiency of the evidence points. However, appellant failed to move for a directed verdict at the close of all the evidence, and it is well established that the sufficiency of the evidence supporting jury submission of a case or the jury's findings is not reviewable on appeal unless a motion for directed verdict was timely made in the trial court. Little v. Bankers Life & Casualty Co., 426 F.2d 509 (5th Cir. 1970); Vergott v. Deseret Pharmaceutical Co.,463 F.2d 12 (5th Cir. 1972). Appellant moved for a directed verdict at the close of appellee-plaintiff's case, but such a motion is not sufficient unless it is renewed at the close of all the evidence. Porter v. Eckert, 465 F.2d 1307 (5th Cir. 1972); see Fredonia Broadcasting Corp. v. RCA Corp., 481 F.2d 781 (5th Cir. 1973). See generally Wright & Miller, Federal Practice & Procedure, §§ 2534, 2536.

Failure to move for a directed verdict does not preclude a party's seeking review on the basis that the trial court erred in not granting the party's motion for a new trial. However, this Court is not inclined to disturb the trial court's exercise of its rather broad discretion in denying such a motion. Harris v. Chanclor, 537 F.2d 203 (5th Cir. 1976); Massey v. Gulf Oil Corp., 508 F.2d 92 (5th Cir. 1975). In this posture our inquiry is limited to whether "there was any evidence supporting . . . the jury's finding," irrespective of its sufficiency, or to "whether plain error has been committed . . . ." Little v. Bankers Life and Casualty Co., supra...