Total Petroleum, Inc. v. Davis, 85-1503

• Decision Date: 02 April 1986
• Docket Number: No. 85-1503,85-1503
• Parties: TOTAL PETROLEUM, INC., Appellant, v. Gary J. DAVIS, d/b/a Gary J. Davis Oil Company, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 476

788 F.2d 476

TOTAL PETROLEUM, INC., Appellant, v. Gary J. DAVIS, d/b/a Gary J. Davis Oil Company, Appellee.

No. 85-1503.

United States Court of Appeals,

Eighth Circuit.

Submitted Oct. 14, 1985.

Decided April 2, 1986.

Arthur L. Smith, Washington, D.C., for appellant.

James E. Reeves, Caruthersville, Mo., for appellee.

Before LAY, Chief Judge, FLOYD R. GIBSON, Senior Circuit Judge, and FAGG, Circuit Judge.

LAY, Chief Judge.

Total Petroleum, Inc. (Total) appeals the denial of its motion for a directed verdict on Total's claim against its distributor, Gary Davis, for money owing on an open account. Total also appeals the district court's denial of its motion for a directed verdict in its favor on Davis' counterclaims for fraud and for violation of the Petroleum Marketing Practices Act, 15 U.S.C. Secs. 2801-2806 (1982) (PMPA). In the alternative, Total seeks a reversal and remand for a new trial on the grounds that the district court ¹ improperly admitted certain evidence and erroneously instructed the jury. For the reasons discussed below, we affirm in part, reverse in part, and remand to the district court for further proceedings consistent with this opinion.

Background

Gary Davis and his father-in-law, Bill Rushin, were partners in Rushin-Davis Oil Company (Rushin-Davis). The partnership had two distributor marketing agreements with Total, an oil and gas refiner, pursuant to which Total sold Rushin-Davis gas and other petroleum products. Total made these products available to the partnership at local exchange terminals, some of which were owned and operated by third parties. Rushin-Davis drivers picked up the gasoline at the local exchange terminals, a process known as "pulling product," and received loading tickets reflecting the amount of product pulled. The exchange terminals then forwarded copies of the loading tickets to Total, and Total billed Rushin-Davis for the amount of product pulled.

When disagreement over management of the partnership arose between Davis and Rushin during the summer of 1981, Davis offered to buy Rushin out. Commerce Bank of Poplar Bluff, the bank from which Davis sought financing for the deal, requested Davis to provide some proof that Total would permit Davis to take over the partnership's distributor marketing agreements. Davis therefore contacted Don Wright, the Total regional manager, and asked what was needed to enable Davis to assume the partnership distribution agreements and to release Rushin from the partnership's obligations. Davis testified that Wright said Davis would have to pay off the partnership's entire debt to Total before Total would release Rushin and that Total would furnish the debt figure. At trial, Wright denied making that statement, testifying instead that he told Davis that Total's credit department would have to make the decision and that Davis would probably have to pay the partnership's past due invoices. Wright further testified that in response to Davis' question regarding what the partnership's current account balance was, Wright replied that because of the lag time in getting information from the terminals to Total, Total could not provide a current balance but that Davis could determine the current balance by looking at the partnership's copies of the loading tickets.

Most of the other events leading up to the closing of the deal between Davis and Rushin are not disputed. Total sent Davis an assumption agreement signed by Total, in which Davis assumed each of the partnership's obligations under the distributor marketing agreements and Total approved the assignment of the agreements. Davis signed the assumption agreement on September 4, 1981. By September 9, 1981, Davis and Rushin had agreed that Davis would pay $78,000 in cash for Rushin's partnership interest and that Davis would assume ownership of all partnership assets and responsibility for all partnership liabilities. Davis formally applied for a $300,000 loan from the bank on September 9. The bank approved the loan the same day. On September 15, Davis gave the bank a promissory note for $300,000 secured by a first deed of trust on all the partnership assets and a second deed of trust on his home. Davis also agreed to pay off a $77,000 debt the partnership owed to the bank. On September 15, Davis and Rushin executed articles of dissolution of the partnership, which were to become effective on (1) Davis' payment of $78,000 to Rushin and Rushin's transfer of the partnership assets to Davis, (2) Rushin's receipt of a release from Total of liability for all partnership debts, and (3) the bank's receipt of assurance from Total that Davis could assume the partnership's distribution agreements. On September 16, the bank applied $77,000 of the loan proceeds to the partnership's outstanding promissory note and placed $78,000 in escrow for payment to Rushin on receipt of the release from Total. Sometime around September 17, Total provided Davis and the bank with a debt figure of approximately $333,705.

The deal was finalized on September 21, 1981, when Bob Huscher, a Total employee, met with Davis and a bank officer to deliver a copy of the receipt and covenant acknowledging payment by Davis to Total of $333,705.31. The receipt and covenant stated that "said sum is in payment of and to be applied to the debts owed to [Total] by Rushin-Davis Oil Company." The bank deposited the remaining loan proceeds in Davis' account, Davis gave Total the amount reflected in the agreement, Huscher gave Rushin the release, and the bank released the $78,000 in escrow to Rushin.

Davis claims that Total told him that the $333,705.31 he paid Total on September 21 represented the total purchase price of all petroleum products that Rushin-Davis had received up to that date for which the partnership had not paid. In fact, the partnership had pulled an additional $155,000 worth of products between September 1, 1981, and September 17, 1981, which had not been invoiced by Total in the course of its billing procedures at the time Total provided Davis with the debt figure. Total subsequently billed Davis for this amount and Davis paid the invoices as they became due, although allegedly under protest. On December 17, 1981, Davis wrote Total a letter stating that he had understood that Total accepted the $333,705.31 check in payment of all debts owed Total by the partnership through September 17, 1981. Davis requested that Total credit his account for the invoices Davis had later paid for products received by Rushin-Davis from September 1 through September 17. Apparently in an attempt to recover amounts for which Davis claimed he was not liable, Davis continued to pull product in December and January for which he refused to pay. On January 20, 1981, after Davis had pulled over $170,000 of product for which he had not paid, Total terminated Davis' right to pull product on credit. Because Davis was unable to obtain gasoline to sell, he was unable to make his loan payments and the bank eventually foreclosed on his business and home.

In April 1982, Total brought suit against Davis to recover the amount due on Davis' account. Davis counterclaimed for fraud, alleging that Total fraudulently misrepresented to Davis the amount Rushin-Davis owed Total, that Davis had relied on the misrepresentation in deciding to buy out Rushin's interest, and that as a result, Davis lost his business and his home. Davis also claimed that Total's termination of the distributorship agreement violated 15 U.S.C. Sec. 2802 (1982) of the Petroleum Marketing Practices Act. The jury found in favor of Davis on Total's claim for money owed. The jury also returned a verdict in Davis' favor on his claims of fraud and violation of the PMPA. The jury awarded Davis $732,000 on his fraud claim but no damages on his PMPA claim. Total appeals, arguing that the trial court erred in failing to direct a verdict in Total's favor on all claims and counterclaims. Alternatively, Total requests the court to reverse and remand for a new trial because of various evidentiary and instructional errors.

Discussion

We initially note that although Total made a motion for a directed verdict in its favor on all claims and counterclaims, Total did not file a motion for a judgment notwithstanding the verdict within ten days after entry of judgment as provided by Fed.R.Civ.P. 50(b). Failure to move for judgment n.o.v. does not preclude review of an earlier motion for a directed verdict. In the absence of such a motion, however, the only relief Total may obtain in this court is the ordering of a new trial; we may not direct the district court to enter judgment for Total. See Johnson v. New York, New Haven & Hartford Railroad Co., 344 U.S. 48, 54, 73 S.Ct. 125, 128, 97 L.Ed. 77 (1952); United States v. Valdosta-Lowndes County Hospital Authority, 696 F.2d 911, 912-13 (11th Cir.1983); Karjala v. Johns-Manville Products Corp., 523 F.2d 155, 157 n. 2 (8th Cir.1975); Tri-State Insurance Company v. United States, 340 F.2d 542, 546 (8th Cir.1965). With this limitation in mind, we consider Total's contentions on appeal.

A. Total's claim for money owed and Davis' counterclaim for violation of the PMPA.

Total first argues that the trial court erred in failing to direct a verdict in its favor on its claim against Davis for money owed because there was no evidence disputing the fact that Davis received at least some product for which he has never paid. Because Davis did not submit to the jury any affirmative defenses to that debt, Total argues, Total was clearly entitled to recover under the trial court's instruction and the evidence presented at trial. ²

Davis first attempts to support the jury verdict by pointing to the inconsistencies in the amounts Total claimed Davis owed and the difficulty Total's credit manager had in explaining how Total determined that amount. In light of these inconsistencies, Davis argues, the jury was entitled to find against Total. Although Davis...