Toyota of Florence, Inc. v. Lynch, 24045
| Decision Date | 15 February 1994 |
| Docket Number | No. 24045,24045 |
| Citation | 442 S.E.2d 611,314 S.C. 257 |
| Court | South Carolina Supreme Court |
| Parties | TOYOTA OF FLORENCE, INC., a corporation, Respondent-Appellant, v. Danny Ray LYNCH; JM Family Enterprises, Inc.; Southeast Toyota Distributors, Inc.; Tender Loving Care Corp.; World Omni Financial Corp.; World Omni Leasing, Inc.; Joyserv Co., Ltd.; Carnett-Partsnett Systems, Inc.; Toyoguard, Inc.; James D. Moran; John Joseph McNally; Terry Moore; W.M. Donohoe; Orville Verner; Al Hendrickson; Robert MacGregor; Dennis Puskaric; Tom Nardelli; and Toyota Motor Sales, U.S.A., Inc., Defendants, Of which JM Family Enterprises, Inc.; Southeast Toyota Distributors, Inc.; Tender Loving Care Corp.; World Omni Financial Corp.; and World Omni Leasing, Inc. are Appellants-Respondents. and Richard L. BEASLEY, Respondent-Appellant, v. Danny Ray LYNCH; JM Family Enterprises, Inc.; Southeast Toyota Distributors, Inc.; Tender Loving Care Corp.; World Omni Financial Corp.; World Omni Leasing, Inc.; Joyserv Co., Ltd.; Carnett-Partsnett Systems, Inc.; Toyoguard, Inc.; James D. Moran; John Joseph McNally; Terry Moore; W.M. Donohoe; Orville Verner; Al Hendrickson; Robert MacGregor; Dennis Puskaric; Tom Nardelli; and Toyota Motor Sales, U.S.A., Inc., Defendants, Of which JM Family Enterprises, Inc.; Southeast Toyota Distributors, Inc.; Tender Loving Care Corp.; World Omni Financial Corp.; and World Omni Leasing, Inc., Appellants-Respondents. . Heard |
Raymond W. Bergan, John G. Kester, Daniel F. Katz, Thomas F. Urban, II, and Paul B. Gaffney, of Williams & Connolly, Washington, DC, Thomas E. Smith, Jr., of Smith & Floyd, P.A., Pamplico, and James H. Quackenbush, Jr. and Hardwick Stuart, Jr., of Adams, Quackenbush, Herring & Stuart, Columbia, for appellants-respondents.
D. Kenneth Baker and Cely Baker Reynolds, of D. Kenneth Baker, P.A., Darlington, for respondents-appellants.
Appellants-respondents appeal from two jury verdicts in favor of respondents-appellants, a criminal contempt order, and an order imposing a sanction. We reverse the sanction order and the finding of criminal contempt, and reverse and remand the verdicts. Respondents-appellants cross-appeal the lower court's setting aside of a separate criminal contempt order against appellants-respondents for post-trial juror contact. This appeal is dismissed.
Appellants-respondents are two corporations, Southeast Toyota Distributors (S.E.T.) and JM Family Enterprises (JM), generally referred to in this opinion as S.E.T. JM, a holding company, is the sole shareholder in S.E.T. S.E.T. is a regional Toyota distributor, covering the states of North and South Carolina, Alabama, Georgia, and Florida. Respondents-appellants are an automobile dealer, Toyota of Florence (T.O.F.) and its sole shareholder, Richard Beasley (Beasley).
Beasley and T.O.F. sued S.E.T. and JM and the suits were consolidated. The jury returned a verdict for Beasley on two causes of action: fraud and intentional interference with a contract. T.O.F. also received jury verdicts on two different causes of action: violation of the state Regulation of Manufacturers, Distributors and Dealers Act (the Act) 1 and RICO.
The trial judge required Beasley and T.O.F. to elect a verdict without prejudice to their rights as to the unelected verdict should this Court reverse on appeal. 2 Beasley elected the contract claim, for which he received $1 million in compensatory damages and $2 million in punitive damages. Although the jury returned this verdict against S.E.T. only, 3 the trial judge ordered judgment entered against both S.E.T. and JM. On appeal, Beasley concedes this ruling constitutes reversible error. T.O.F. elected its Act verdict, in which the jury awarded it compensatory damages of $5 million and punitive damages of $3.5 million against both S.E.T. and JM. The trial judge remitted the compensatory award to $4,525,232, then doubled it to $9,050,464 pursuant to § 56-15-110(1) (1991). He also awarded T.O.F. $830,000 in attorneys fees and costs pursuant to the Act.
After trial the judge entertained several contempt issues. JM and S.E.T. appeal a contempt finding for pretrial publicity, and a sanction not connected with any contempt finding requiring them to pay "costs" of $6,500. Beasley and T.O.F. cross-appeal the refusal to hold JM and S.E.T. in criminal contempt for contacting jurors after the trial.
Danny Lynch was a car wholesaler in the Pee Dee area of South Carolina. In the fall of 1985 he approached an S.E.T. management employee, Nardelli, about obtaining a Toyota dealership. S.E.T. employees met with Lynch and suggested he approach the current Florence Toyota dealer (Jordan) about selling his dealership. Danny Lynch was repeatedly told Jordan was disfavored by S.E.T. because he was not a "team player", that is, he did not participate in various programs offered by S.E.T. and different JM companies. 4 Among other things, Lynch was informed of bogus sales reporting practices encouraged by S.E.T. in which Jordan did not participate.
After Lynch had negotiated with Jordan to buy his dealership, S.E.T. told Lynch he was not financially qualified as a purchaser. Lynch turned to his long-time banker, Beasley, as a potential investment partner in the dealership. After investigating the deal and in partial reliance on documents shown him by S.E.T. employees, Beasley agreed to participate. He was to receive 49% of the stock, and Lynch was gradually to buy Beasley's shares.
After the sale was closed, S.E.T. told Lynch and Beasley their financial statement was short $400,000 in capital and would be rejected by the national Toyota distributor. Beasley walked away from the deal at that point, content to take his losses. At the suggestion of S.E.T., Lynch falsified $400,000 worth of used cars and added this "asset" to the financial statement. The sale of the Jordan dealership to Lynch and Beasley was approved by the national distributor and Lynch began managing the business in February 1986. Lynch was forced out as manager approximately fifteen months later, and Beasley bought all Lynch's stock.
S.E.T. and JM argue that certain trial errors so prejudiced the proceedings that the jury verdicts must be set aside. We agree that the closing argument of nominal defendant Danny Lynch's counsel requires the verdicts be reversed. We have also addressed certain other issues that will arise on retrial.
Lynch was a nominal defendant at trial. On the last day, however, he signed a settlement which included an agreement that he receive 10% of the first $5 million recovered by T.O.F., and 27% of all amounts in excess of $5 million. During his closing argument Lynch's counsel asked for damages against S.E.T. and JM despite having been warned by the judge not to do so, and illustrated his argument with hand-drawn posters.
Three posters depict men identified in the drawing with S.E.T. engaged in various acts: (1) paying off an S.E.T. witness and giving him answers to questions; (2) offering money to a blindfolded man; and (3) feeding documents into the S.E.T. shredder. The S.E.T. men all have black hair and vaguely Oriental features. The intent to identify the S.E.T. defendants with the Japanese is obvious when the drawings of the S.E.T. employees are compared with the poster depicting the "bad" American defendant. Another poster depicts a map of the Southeastern United States with the states served by S.E.T. colored in. A rather amorphous blob is drawn in each state; when viewed with counsel's contemporaneous argument, "This is the five-state area, and it's blown up all over the Southeast", it becomes clear that the blobs represent mushroom cloud explosions.
S.E.T. made no contemporaneous objection to these posters and, in fact, did not even view their details until after all closing arguments. Even then, S.E.T. made no objection or request for a mistrial until its post-trial motions. When the issue was raised, Lynch's counsel defended the drawings saying the individuals were not intended to look Oriental, but rather were supposed to be Italian-looking. It is very telling that counsel defended the accusation he was evoking a racial prejudice by contending he was instead trying to imply an ethnic stereotype.
The trial judge ruled S.E.T. had waived any objection to the posters because the objection came too late, and denied a new trial motion on this ground. The general rule is that the lack of a contemporaneous objection to an improper argument acts as a waiver. Varnadore v. Nationwide Mutual Ins. Co., 289 S.C. 155, 345 S.E.2d 711 (1986). This Court has held, however, that even in the absence of a contemporaneous objection, a new trial motion should be granted in flagrant cases where a vicious, inflammatory argument results in clear prejudice. South Carolina Highway Dept. v. Nasim, 255 S.C. 406, 179 S.E.2d 211 (1977). We can hardly conceive of a more outrageous argument than that made here. While we do not condone S.E.T.'s failure to make a contemporaneous objection, we find it would be wholly unreasonable for any attorney to anticipate this type of abhorrent conduct.
Prejudice is clear, especially since the trial judge found it necessary to remit the actual damages awarded to T.O.F. We reverse and remand both jury verdicts against S.E.T. and JM under the extraordinary circumstances here.
S.E.T. and JM also seek reversal because of the testimony of nominal defendants Lynch and Nardelli and the actions of their attorneys who, throughout the trial, advanced the plaintiffs' cause and impugned the defense. While we express grave reservations about the impact of these actions on the fairness of the original trial, we do not reverse on this ground having already reversed because of the improper closing argument. We are confident the parties' rights to a fair trial can be protected in...
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...to reach the proper result in this case, I would adopt the reasoning of our Court in the case of Toyota of Florence, Inc. v. Lynch, et al., --- S.C. ----, ----, 442 S.E.2d 611, 615 (1994) (although not condoning the procedural default, this Court overlooked the lack of a contemporaneous obj......
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