Vosevich v. Doro, Ltd.

• Decision Date: 24 February 1976
• Docket Number: No. 36546,36546
• Citation: 536 S.W.2d 752
• Parties: Sam VOSEVICH, Plaintiff-Respondent, v. DORO, LTD., a corporation, et al., Defendants-Appellants. . Louis District, Division One
• Court: Missouri Court of Appeals

Page 752

536 S.W.2d 752

Sam VOSEVICH, Plaintiff-Respondent, v.DORO, LTD., a corporation, et al., Defendants-Appellants.

No. 36546.

Missouri Court of Appeals, St. Louis District, Division One.

Feb. 24, 1976.

Motion for Rehearing to Court En Banc or to Supreme Court

Denied April 13,

1976.

Application to Transfer Denied June 14, 1976.

Greensfelder, Hemker, Wiese, Gale & Chappelow, James L. Hawkins, Jerry D. Perryman, St. Louis, for defendants-appellants.

Lewis, Rice, Tucker, Allen & Chubb, James W. Herron, St. Louis, for plaintiff-respondent.

DOWD, Judge.

Plaintiff brought this quantum meruit suit to recover the reasonable value of his services in selling and promoting football shoes.Plaintiff sued Doro, Ltd., David R. Mars, Jr., and George P. Meier.The jury found for the plaintiff against all the defendants and assessed his damages at $64,500.We reverse the judgment and remand the cause for a new trial.

In determining the sufficiency of plaintiff's evidence, this court must give the plaintiff the benefit of every reasonable favorable inference which the evidence tends to support.Bremen Bank & Trust Co. v. Bogdan, 498 S.W.2d 306(1)(Mo.App.1973);James v. Turilli, 473 S.W.2d 757(6)(Mo.App.1971).

The plaintiff's evidence tended to show the following.The defendant corporation is a St. Louis County firm that imported and sold a football shoe called the 'Viking Athletic Shoe.'Defendants, David R. Mars, Jr., and George P. Meier had originally formed a partnership, 'M & M Imports,' in 1961.In March 1966 the two men incorporated and were the sole stockholders of the defendant corporation.The plaintiff worked for the defendants from late 1965 through 1970, and during that period sales of Viking shoes increased from $17,512 in 1966 to $259,518 in 1970.

Plaintiff had been Mars' junior high school football coach and met Mars accidentally in late 1965 and was shown the Viking football shoe.At that time the shoe was not selling and was no longer being imported.The plaintiff, impressed by the comfort and safety features of the shoe, was the first person to recognize these features and integrate them into a sales approach.

Plaintiff's sales approach was to market the shoes not as store items but as specialty items with emphasis on the safety features of the shoes.From late 1965 to 1967plaintiff personally delivered his sales talks to the Little League, high school and college football coaches and athletic directors in the St. Louis area.Although plaintiff sometimes wrote orders on the spot, the football officials usually sent their orders to the office after he had departed.Thus plaintiff has no direct knowledge of the number of local area sales that resulted from his efforts.

In 1967plaintiff and the individual defendants decided to sell the shoes nationally, and a local sporting goods store thereafter handled all St. Louis area reorders.The new sales strategy was for plaintiff and one of the individual defendants to attend sporting goods and athletic conventions and shows throughout the country in order to promote shoe sales.At these shows they would contact manufacturers representatives and try to interest them in selling the shoes in their sales territories.

From 1966--70 plaintiff attended approximately a dozen shows.Sometimes the plaintiff alone attended these shows, but usually Mars went with him.If accompanied by Mars, plaintiff would do about 90% of the work in the booth, and Mars permitted plaintiff to do almost all the talking.At these shows plaintiff would first interview prospective manufacturers representatives he would deliver his sales talk and then insist the representatives sell the shoes as a specialty item.If plaintiff was favorably impressed with the prospective representatives he would recommend them to Mars.Mars always made the final hiring decisions, but he always seemed to follow the plaintiff's recommendations.

From 1966--70 plaintiff held the title of 'National Sales Manager' for the shoes, and he sent out correspondence over his signature.Besides interviewing prospective representatives at shows, the plaintiff performed many other tasks.He kept up his contacts with area football officials.He occasionally telephoned the representatives to motivate them or help with their sales approaches.Plaintiff once made a trip to Tulsa to increase sales in that area.He once made a trip to collect a business debt for the defendants.The plaintiff helped Mars entertain European businessmen in his home.He came to the office on occasion and wrote correspondence, plus helping in the preparation of sales brochures the defendants mailed to prospective customers.

Plaintiff characterized himself as the 'outside' man, who was responsible for the selling and promoting of the shoes.Mars was the 'inside' man, in charge of clerical work, desk work, shipments, orders, and other duties.

During all this time plaintiff worked two weeks every month for the defendants, averaging about 25 hours per week.The remainder of the month plaintiff was an insurance consultant in New Orleans. Plaintiff never demanded any compensation for his sales and promotional services because he and Mars were good friends, and because he knew the company was struggling during its early years.Plaintiff was reimbursed for most of his show expenses, but he was never compensated for his services.The plaintiff and Mars sometimes discussed compensation, but no definite agreement was ever concluded.The compensation plaintiff desired and expected, however, was an interest in the company once shoe sales were substantial.¹

The defendants' first contention on appeal is that the trial court erred in admitting into evidence certain financial information about the defendants.Defendants claim this financial information not only was irrelevant to the case's contested issues, but was a prejudicial factor in the jury's consideration of the reasonable value of plaintiff's services.We agree.

Over defendants' objections the trial court admitted into evidence the following financial information: (A) The company dividends paid in 1969 to Mars and Meier, the sole stockholders, amounting to $7500; in 1970, $4600.(B) The company's gross profits for 1969, computed by deducting the cost of goods sold from the gross sales receipts, were $52,538.The net profits for 1969 were $6283.The company's gross profits for 1970 were $94,580.(C) The company's retained earnings at the end of 1969 were $16,077; at the end of 1970, $40,531.(D) The initial investments of Mars and Meier in Doro, Ltd., totalled $4912.(E) As of December 31, 1970, the fair market value of the company was estimated at approximately $300,000.

We note the general rule is that evidence of the wealth or financial standing of the parties is not ordinarily admissible in contract actions.22 Am.Jur.2dDamages, § 319(1965).Missouri has adopted this rule for both contract actions and quantum meruit suits.Springli v. Mercantile TrustCo., 33 S.W.2d 311(1--2)(Mo.App.1960).Evidence of the defendants' financial worth is admissible in an action seeking punitive damages.State ex rel. Kubatzky v. Holt, 483 S.W.2d 799(9)(Mo.App.1972).This is not an action seeking punitive damages but rather an action for compensatory damages.

A quantum meruit suit is grounded on the principle that no one should be unjustly enriched at the expense of another.Cavic v. Missouri Research Laboratories, Inc., 416 S.W.2d 6, 8(Mo.App.1967).The general rule concerning the measure of recovery in quantum meruit actions for services furnished is as follows:

'The measure of recovery for services furnished or goods received under the doctrine of unjust enrichment, as distinguished from the doctrine of contracts implied in fact, is the value of the actual benefit realized and retained.If there is no special agreement as to the amount of compensation and the services are not intended to be gratuitous, the law implies a promise by the employer to pay what services reasonably are worth, which is determined largely by the nature of the work and the customary rate of pay for such work in the community and at the time the work was performed.'66 Am.Jur.2d, Restitution and Implied Contracts, § 28(1973).(Emphasis added).

This measure of recovery in quantum meruit suits for services was applied in the case of Cavic v. Missouri Research Laboratories, Inc., supra.There a sales representative brought a quantum meruit action for a sum he claimed was due him as commissions on orders he obtained for the defendant company.The court said the sales representative could recover the price usually and customarily paid for his services or like services at the time and in the locality where the services were rendered.

Plaintiff does not agree with this method of computing the reasonable value of the services.Plaintiff maintains that the benefit received by the defendants is a principal factor to be considered by the jury in arriving at a determination of the reasonable value of the services rendered by the plaintiff.Thus the plaintiff contends the financial information about the defendants is a valuable indication of the benefits they received from the plaintiff's efforts.To support this idea, plaintiff claims he was a prime mover in the shoe sales program; that the shoe sales were always a principal component of the company's total sales; that in 1969 and 1970 the shoe sales actually accounted for all of the company's gross sales receipts.As plaintiff notes in his appellate brief: 'To determine benefit, it is obviously necessary to know where the growth began and where it ended.'

We believe the measure of recovery described in Cavic, with its emphasis on the nature of plaintiff's services and the customary community charges for the services, is the proper approach.Having the reasonable value of plaintiff's services dependent on the financial benefits of the defendants is not the Missouri law.

In...