Opinion ID: 1148911
Heading Depth: 1
Heading Rank: 4

Heading: Removing the Defendant's Profit

Text: In a Hammond-Green Oil review, we are required to determine whether, if the wrongful conduct was profitable to the defendant, the punitive damages removed that profit and were in excess of the profit, so that the defendant recognizes a loss. Green Oil, 539 So.2d at 223. The plaintiffs argue that Ford derived from its fraud an amount of money exceeding $15 million, which was the total amount of Ford products sold and interest paid by the River City dealership. The plaintiffs also emphasize that Ford obtained substantial benefits through its recruitment of minority dealers, such as the plaintiffs. They cite, for example, that the 1987 report to Ford's board of directors recognized that the minority dealers had sales that year totaling approximately $1 billion. Finally, the plaintiffs allege that the Minority Dealer Program provided Ford the added benefits of positive corporate image and allowed Ford to keep dealerships in less desirable geographical locations in business. We conclude that Ford did derive at least some temporary benefits as a result of its fraudulent misrepresentation and suppression in this case but that determining a specific dollar amount of profit is difficult. We find the $15 million figure cited by the plaintiffs to be highly exaggerated, for it simply represents the gross sales of River City Ford, not the profits to Ford itself. The profits flowing to Ford from those retail sales would have been only some unknown fraction of the gross sales. But even if that direct profit was discernible, more problematic for the plaintiffs' position is the fact that there is no evidence to suggest that no one else would have run the Selma dealership had the plaintiffs decided not to invest. It is true that the evidence indicates that Ford was having trouble attracting a minority dealer to Selma. But as the plaintiffs themselves emphasize, Ford, in insisting that the Selma dealership be operated by a minority dealer, had blocked at the last moment a proposed sale to a local white Lincoln-Mercury dealer who had sought to expand his business. Thus, there is every indication that Ford, absent its fraud, might have had to settle for a white dealer in Selma, but nothing suggests anything approaching a $15 million direct profit to Ford. As Ford points out, if there is any reasonable inference to be drawn from the evidence it is that Ford probably surrendered some immediate profits from sales of Ford products that likely would have resulted from having a more experienced dealer than the plaintiffs operating in Selma. In addition, the issue we address here is the profit Ford derived from its specific fraudulent conduct in this case, not the benefits Ford may have obtained from its lawful, indeed laudable, voluntary affirmative action program as a whole. We agree that the evidence would reasonably allow the finding that the Minority Dealer Program sooner or later improves Ford's overall profits by providing Ford a positive corporate image, by increasing sales to minorities, and by keeping open some of its dealerships that otherwise might close. But adding a single minority Ford dealer in Selma, Alabama, translates only into some small incremental benefit to the program as a whole. Concentrating on benefits to Ford from the entire Minority Dealer Program may help one to understand Ford's motivation for attempting to attract minority investment, but such a focus can be misleading to one attempting to assess Ford's profit in this case. It does appear, however, that Ford valued the Selma dealership as especially attractive for its potential to advance the image of both Ford generally and the Minority Dealer Program specifically. Given Selma's national association with the civil rights movement, Ford believed that the operation of a successful minority dealership there would demonstrate both the viability of minority dealerships in the program and Ford's resolve in giving opportunities to minorities. Thus, a minority dealer in Selma might have increased Ford sales to minorities locally and perhaps would have encouraged other minorities to similarly invest in a Ford dealership, although, as noted above, the record does not suggest that the consistently profitable Selma dealership was in any danger of closing absent the plaintiffs' investment. However, in terms of removing the defendant's wrongfully obtained profit in this case, it is difficult to see that Ford has still retained any significant profit it might have anticipated. An attempted minority dealership in Selma might allow Ford to be viewed as having extended an opportunity to a minority dealer, but the dealership's visible failure would likely only discourage future minority investment.