Opinion ID: 1694680
Heading Depth: 1
Heading Rank: 2

Heading: Larry Duke d/b/a Duke's Vending

Text: Larry Duke, the sole proprietor of Duke's Vending, testified that, at the end of 1996 or early in 1997, he learned that Dixie was experiencing financial trouble. [8] In early 1997, Duke approached members of the Mims family and expressed interest in purchasing Dixie's accounts and the equipment used to service the accounts. The two began negotiating. According to Duke, they orally agreed to the purchase terms in February 1997. [9] Because Duke had filed a petition in bankruptcy for protection under Chapter 13 that was pending during this time, he proposed to obtain financing from Carl Henry, a private investor located in Georgia with whom Duke had previously engaged in business. Duke testified that because Dixie's customers were actively trying to locate a new supplier for their locations, he immediately began servicing Dixie's vending machines and filling those machines with Duke's products in order to avoid losing the accounts. Todd Mims, one of the owners of Dixie, testified that, upon reaching an agreement with Duke, he drafted a letter to Dixie's vending-account customers informing them that Dixie had sold its vending machines to Duke and that Duke would service their vending accounts from that point forward. This letter was undated. However, it is clear that when Dixie sent this letter to its customers, no agreement regarding the purchase transaction had been executed and Dixie's debt to STI had not been paid. In fact, Duke had not yet obtained financing for the transaction. Duke began servicing Dixie's vending accounts in mid-February, immediately after reaching the oral agreement with Dixie. [10] Duke testified that a few days later, Duke met with Kuntz, Tom's Foods division sales manager. [11] According to Duke, Kuntz said he was aware that Duke was working the Dixie vending accounts and machines, that Tom's Foods was going to repossess Dixie's vending machines, and that Duke had no right to sell his products out of them. Duke asserts that he explained to Kuntz that he had negotiated a deal to purchase both Dixie's vending machines and Dixie's vending accounts. Duke claimed that, at approximately the same time he began servicing Dixie's accounts, Tom's Foods began its repossession efforts. As noted, those efforts consisted of placing repossession notices on Dixie's vending machines, turning machines around so that they were inaccessible to customers, or physically removing machines from Dixie's account locations. Duke alleged that, because he had replaced some of Dixie's vending machines with his own machines before Tom's Foods began its repossession efforts, Tom's Foods repossessed some of Duke's vending machines by turning them around or by placing repossession stickers on them. Duke also claimed that employees of Tom's Foods physically removed a few of his vending machines from their locations. [12] In his deposition, Duke testified that those actions appeared to be a mistake on Tom's Foods part. Later at trial, Duke claimed that his machines were easily distinguishable from Dixie's and, therefore, that Tom's Foods could not have repossessed Duke's machines by mistake. (Duke's brief at p. 10). Additionally, Duke claimed that employees of Tom's Foods crow-barred their way in to some of Dixie's vending machines and to some of his own that he had placed at Dixie account locations; Duke claimed that when they did so the employees removed whatever product was inside the vending machine and replaced it with a Tom's Foods product. [13] Duke also alleged that employees of Tom's Foods removed any money they found in Dixie's vending machines. Duke also complained that Tom's Foods employees began improperly soliciting Dixie's account holders; Duke alleges that, in some instances, Tom's Foods simply replaced Dixie's (or Duke's) vending machines with its own and that those actions were taken without the permission or knowledge of the customer. Duke asserts that those actions interfered with his efforts to obtain or retain Dixie's accounts. Duke testified that, on some unspecified date, he and Kuntz met again and Kuntz asked Duke to provide the locations of Dixie's vending machines. According to Duke: [B]asically, [Kuntz] wanted to talk a deal. And he wanted to make some kinds of arrangements. It was important for him to get the list [of the locations of the Dixie vending machines], so that he [would know] where the  I could understand why he wanted to identify the machines and where they [were] for the bank. He went on to try to work some kind of deal where possibly I could run Tom's [Foods] product or buy some Tom's [Foods] product and sell it through my machines. He thought it was more equitable or whatever, because I had all these machines in place, plus Duke Vending machines, plus, then Dixie Snax. And he'd like to see all those machines be partially full of Tom's [Foods products]. He'd be doing a lot more business than what he was at that particular time. Duke testified that he believed Tom's Foods was legally entitled to know where Dixie's vending machines were located and that Duke needed to stop Tom's Foods from repossessing the machines in order to save his agreement with Dixie. Duke claimed that he had no problem selling Tom's Foods products in his or Dixie's vending machines if doing so would save his agreement with Dixie. [14] Duke also testified that Kuntz promised to back off and to leave the vending machines alone, so that Duke had a chance to make his agreement with Dixie work, if Duke would tell Kuntz where all of Dixie's vending machines were located. According to Duke, Kuntz wanted the locations of the vending accounts only to verify the condition of the equipment and report back to STI. For these reasons, Duke provided to Kuntz a list of the locations of all of Dixie's vending machines. [15] Duke claimed that after Kuntz obtained the list of the locations of Dixie's vending machines, Tom's Foods employees began using the list to further their repossession efforts. Tom's Foods claimed that it first learned of Duke's involvement with Dixie in late February. On March 7, 1997, Tom's Foods sent Duke a letter demanding that Duke stop using Dixie's vending machines because of the lien STI had on the machines. [16] On March 14 and March 19, 1997, Tom's Foods again protested Duke's use of Dixie's vending machines. Duke acknowledged at trial that, in February and March 1997, he and Tom's Foods were both competing to obtain the vending-machine accounts Dixie had abandoned. Duke, however, claimed that he was acting as an agent for Dixie and that he, therefore, had authority to service those accounts. [17] Todd Mims testified at trial that Duke was servicing Dixie's vending accounts and using Dixie's vending machines until Duke and Dixie could finalize the purchase transaction. Mims testified that Duke was acting as Dixie's agent until the purchase transaction could be completed. Mims also testified that Duke was told that STI had a lien on Dixie's vending machines and that both he and Duke knew that the deal could not be consummated without the approval of STI and Tom's Foods. On March 19, 1997, Duke's attorney notified Dixie's attorney that the purchase transaction was off. According to the notes maintained by Dixie's attorney, Duke's attorney had advised Duke not to proceed with the proposed transaction and had advised Duke to return Dixie's vending machines. According to Duke, he continued to operate Duke's Vending for only a few months after the proposed Dixie-Duke purchase transaction fell through. He then abandoned his vending business and converted his Chapter 13 petition in bankruptcy to a Chapter 7 petition. On December 16, 1997, Duke and Dixie sued Tom's Foods, alleging intentional interference with business or contractual relations. Both Dixie and Duke asserted that Tom's Foods had interfered with Dixie's attempt to sell its vending machines and its vending-machine accounts to Duke. Tom's Foods answered the complaint with a general denial. Tom's Foods also asserted affirmative defenses of justification and a legitimate economic motive and/or bona fide business competition. In its answer, Tom's Foods also asserted counterclaims alleging breach of contract, open account, account stated, wrongful detention, and conversion against Dixie, Ronnie Mims, and Todd Mims; those counterclaims arose out of numerous vending accounts, promissory notes, and leases executed in favor of Tom's Foods by Dixie and/or Ronnie Mims and Todd Mims. Tom's Foods alleged that its losses amounted to $208,386.18 plus attorney fees and costs. On October 24, 2002, Tom's Foods moved for a judgment as a matter of law as to the claims asserted against it by Duke and Dixie. As to Dixie's claim of intentional interference, Tom's Foods argued that it was entitled to a judgment as a matter of law because, it argued, (1) STI and Dixie were parties to a business relationship involving Dixie's equipment, including the vending machines, (2) Tom's Foods was acting as STI's agent at all times relevant to the repossession and was legally justified in repossessing Dixie's vending machines, and (3) because Tom's Foods was acting as STI's agent, Tom's Foods was not a stranger to any of Dixie's dealings involving the vending machines or any of its other equipment. As to Duke's claim of intentional interference, Tom's Foods argued that it was entitled to a judgment as a matter of law because, it argued, (1) Tom's Foods was acting as STI's agent in repossessing Dixie's vending machines (which Duke had not purchased at the time of the repossession), (2) Duke had no right to use Tom's Foods logos (that were apparently displayed on some of Dixie's machines) in its business, and (3) Tom's Foods was competing with Duke to obtain the abandoned Dixie vending-machine accounts and did not act wrongfully in pursuing those accounts. The trial court denied Tom's Foods' motion. The case went to trial. At the close of the defendant's evidence, Dixie entered a stipulation of dismissal with prejudice as to its claim of intentional interference asserted against Tom's Foods; Tom's Foods also entered a stipulation of dismissal as to all counterclaims asserted against Dixie, Ronnie Mims, and Todd Mims. Duke's claim of intentional interference with business or contractual relations was the only claim submitted to the jury. The jury returned a verdict in favor of Duke, awarding him $500,000 in compensatory damages and $4 million in punitive damages. Tom's Foods filed a motion for a new trial, or in the alternative, for a remittitur. Tom's Foods also filed a motion for a judgment as a matter of law, pursuant to Rule 50(b), Ala. R. Civ. P. The trial court denied Tom's Foods' postjudgment motion for a judgment as a matter of law. The trial court also denied Tom's Foods' postjudgment motion for a new trial, conditioned on Duke's accepting an order of remittitur of the punitive damages award from $4 million to $750,000. Duke accepted the remittitur, and the trial court entered a judgment. Tom's Foods appeals from the denial of its postjudgment motions, making the following arguments: I. Duke's tortious interference claim fails as a matter of law. II. Tom's Foods' conduct cannot be actionable because STI was acting within clear legal rights and Tom's [Foods] was STI's agent. III. Duke failed to prove there was a business relationship between Dixie and Duke sufficient to support a tortious interference claim. IV. A new trial is required because of the trial court's error in permitting prejudicial evidence regarding other lawsuits against Tom's [Foods]. V. A new trial is required because the compensatory damages award is speculative, not supported by the evidence, and excessive in all events. VI. The punitive damages award, even as reduced by the trial court, is excessive under the facts and applicable federal and state standards. Duke appeals from the trial court's order of remittitur, asserting that the original $4 million punitive-damages award was supported by the evidence and should be reinstated.