Court Opinion

ID: 9533961
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:35:56.45893+00
Date Added: 2024-06-11T13:29:14.213486
License: Public Domain

SABERS, Justice
(dissenting).
I dissent from the majority opinion on Issues I, II, IV, and V. The trial court properly instructed the jury on damages, properly admitted Exhibit 100, and properly permitted punitive damages for termination of the franchise and for defamation.
I.

Measure of damages for violation of SDCL 37-5-3.

SDCL 37-5-4 provides in part that “Each and every person and corporation who ... violates any provision of §§ 37-5-1 to 37-5-3, ... shall be liable to any dealer damaged thereby for all damages caused to such dealer by such violation.”
The trial court defined damages as:
1. The amount of gross profits, if any, minus direct or variable expenses, lost in the past and are reasonably certain to be lost in the future as a proximate result of the termination of its International Harvester dealership contract. You are not to award the costs of fixed future overhead costs which Groseth International can avoid by cutting costs or can apply to some other profitable use.
You are to consider only those profits which Groseth International has proved by a preponderance of the evidence that it would have earned if it , had retained the International Harvester line of farm equipment.
Your award of profits, if any, may not exceed the profits Groseth International would have earned from its International Harvester equipment dealership if it had not been terminated, (emphasis added).
The majority opinion claims “The instruction misstates the proper measure of damages” and asserts that
[T]he correct measure of damages, as it relates to this case, is: The amount of net profits (computed according to sound and accepted accounting principles) lost in the past and reasonably certain to be lost in the future as a proximate result of the termination of the franchise plus the amount of fixed future overhead expenses which plaintiff proves with reasonable certainty cannot be avoided by cutting costs or application to some other profitable use. (emphasis in original).
I respectfully submit that there is no real difference between the two instructions.
The majority relies on the statement that “Groseth International concedes that the use of the term ‘gross profits’ is a misnomer and should have been either ‘gross earnings,’ ‘gross receipts,’ or ‘gross sales.’ ” It is obvious that even if “gross profits” is a misnomer it is less favorable to Groseth than “gross earnings,” “gross receipts” or “gross sales.” It certainly cannot be relied upon by Tenneco or the majority for reversal. Under the instructions suggested by the majority, the proper measure of damages is EQUAL to net profits (lost in the past and reasonably certain to be lost in the future), PLUS the amount of fixed overhead expenses unavoidable by cost cutting or application to other use. In short, the majority’s measure of damages is equal to net profits plus unavoidable overhead.
The trial court instructed that the proper measure of damages EQUALS gross profits, if any, LESS direct or variable expenses:
Direct expenses were defined as cost of goods and merchandise;
Variable expenses were those eliminated because Groseth could no longer sell IH equipment, including all sales, salesmen’s expenses, advertising, and salesmen’s car expenses.
In addition, the trial court instructed the jury:
You are not to award the costs of fixed future overhead costs which Groseth International can avoid by cutting costs or can apply to some other profitable use.
*282You are to consider only those profits which Groseth International has proved by a preponderance of the evidence that it would have earned if it had retained the International Harvester Line of farm equipment.
Your award of profits, if any, may not exceed the profits Groseth International would have earned from its International Harvester equipment dealership if it had not been terminated.
In short, under the trial court’s instruction, the measure of damages was gross profits less direct and variable expenses and avoidable fixed, overhead expenses. There is no substantial difference between the trial court instruction and the majority opinion instruction. Both instructions arrive at the proper measure of damages. The fact that the trial court instruction begins by describing gross profits as opposed to net profits is a distinction without a difference. There was no error, the error is the majority rushing to judgment of reversal.
II.

Admissibility of Exhibit 100.

The majority opinion’s conclusion of error concerning the admission of Exhibit 100 hinges on its own mistake in Issue I concerning the measure of damages. It is established that no real difference or error existed. Therefore, the measure of damages used in Exhibit 100 is consistent with the correct measure of damages and the trial court properly admitted the same. Whether the items contained thereon were actually proven or sustained by Groseth were proper subjects for argument to and determination by the jury.
IV.

Punitive damages for termination of the franchise.

The sole reason given by the majority for reversing the jury award of $1,600,000 in punitive damages is “Under the facts of this case, where we reverse the entire compensatory damage verdict, it is appropriate to reverse the punitive damages verdict.” Cf, Hulstein v. Meilman Food Industries, 298 N.W.2d 889 (S.D.1980). In other words, the reversal in this section is also dependent on the mistake made by the majority in Issue I concerning the measure of damages.
V.

Defamation.

In this section the majority opinion reverses the part of the judgment awarding plaintiff actual and exemplary damages for defamation because “the statement that ‘we can’t afford to have a bad dealer out there’ is not capable of being and is not defamatory to Groseth and that issue should not have been submitted to the jury.” I disagree.
SDCL 20-11-4 states in pertinent part: Slander is a false and unprivileged publication, other than libel, which: ...
(3) Tends directly to injure [a person] in respect to his office, profession, trade, or business, either by imputing to him general disqualification in those respects which the office or other occupation peculiarly requires, or by imputing something with reference to his office, profession, trade, or business that has a natural tendency to lessen its profit; ...
“The law has always been very tender of the reputation of tradesmen, and therefore words spoken of them in the way of their trade will bear an action that will not be actionable in the case of another person.” Prosser and Keeton, The Law of Torts § 112 at 790-91 (5th ed. 1984) (Quoting Harman v. Delany, 2 Strange 898, 93 Eng. Rptr. 925 (1731)).
On January 23, 1985, the Sioux Falls Argus Leader ran a story entitled “Hard times for farmers, businesses.” In that article, six implement dealers in South Dakota were identified as those whose dealership contracts were cancelled as a result of the Case/Tenneco buyout of International Harvester. Among those dealers quoted in the article was Clifford Groseth.
Case and Tenneco officials contacted the Argus Leader on the following day and on January 24, 1985, the Argus Leader ran an *283article entitled “J.I. Case defends implement decision.” The article was placed on the identical page as the previous article.
The January 24,1985, article contains the following statement:
Charles Schneider, a spokesman for Ten-neco, Case's parent company, said: “It’s a very detailed in-depth business evaluation. We’re taking on John Deere; we can’t afford to have a bad dealer out there.”
The contract cancellations are necessary because Tenneco does not want two Case/International Harvester dealerships competing in the same area, Schneider said, (emphasis added).
Groseth’s brief points out that defendants objected to all parts of the article except the defamatory portion. Thus, the defamatory statement was,, at defendants’ request, out of context and the exhibit received by the jury. Thus, defendants waived any argument regarding context.
Schneider, an expert in public relations, recognized that the bad dealer comment was improper in that it left the impression that there was something wrong with the terminated dealers. The statement imputes a general disqualification to Groseth International and has a natural tendency to lessen its profit. SDCL 20-11-4.
Groseth’s customers and farmers in general had no problem determining this statement was precise, definite, and unambiguous. As Chuck Tienken, a former Gro-seth employee, testified:
That news from that article, or whatever, came out, that news spread like wild fire. Everyplace you would go, everybody that would come in, would have comments about it. Many comments about “We didn’t realize Cliff was in that bad of shape.” “We didn’t realize that someone considered this business that bad.”
In contrast, the truth is that defendants can point to absolutely no evidence indicating that Groseth was anything other than an exemplary dealership.
Groseth was an XL dealer, a distinction reserved for only the finest International Harvester dealers. Schneider’s statement was one of fact and not of opinion. Immediately before the defamatory statement, Schneider stated that the review process was a very detailed, in-depth business evaluation.
The majority opinion states:
The correct procedure for determining the meaning and defamatory character of a communication is set forth in Restatement (Second) of Torts § 614 (1977) which provides:
(1) The court determines
(a) whether a communication is capable of bearing a particular meaning, and
(b) whether that meaning is defamatory.
(2) The jury determines whether a communication, capable of a defamatory meaning, was so understood by its recipient.
Likewise, in Bego v. Gordon, 407 N.W.2d 801 (S.D.1987), we held concerning defamation: “Whether a tort was committed is a question of fact for the jury.” Id. at 812.
In this case, the trial court properly submitted the question to the jury and the jury determined that the communication was capable of a defamatory meaning and was so understood by recipients, and Groseth’s customers. This court is supposed to review the evidence in a light most favorable to the verdict. Stoltz v. Stonecypher, 386 N.W.2d 654 (S.D.1983). To do otherwise is to jump in the jury box and violate Gro-seth’s constitutional right to a jury trial. We should review the evidence in the light most favorable to the verdict and affirm, not reverse, the verdict for Groseth.
In summary, we should affirm the verdict for compensatory damages in the amount of $1,312,000, punitive damages thereon in the amount of $1,600,000, defamation damages in the amount of $50,000, and punitive damages thereon in the amount of $200,000. We should do our duty and not violate Groseth’s constitutional right to trial by jury.