Econo Lodges of America, Inc. v. Norcross Econo-Lodge, Ltd.

764 F. Supp. 396, 1991 U.S. Dist. LEXIS 6353, 1991 WL 75393
CourtDistrict Court, W.D. North Carolina
DecidedApril 11, 1991
DocketNo. C-C-89-449-P
StatusPublished
Cited by3 cases

This text of 764 F. Supp. 396 (Econo Lodges of America, Inc. v. Norcross Econo-Lodge, Ltd.) is published on Counsel Stack Legal Research, covering District Court, W.D. North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Econo Lodges of America, Inc. v. Norcross Econo-Lodge, Ltd., 764 F. Supp. 396, 1991 U.S. Dist. LEXIS 6353, 1991 WL 75393 (W.D.N.C. 1991).

Opinion

ORDER

ROBERT D. POTTER, District Judge.

THIS MATTER is before the Court on Plaintiff’s motion, filed February 6, 1991, for Judgment Notwithstanding the Verdict (“JNOV”), or in the alternative, for a new trial. On February 27, 1991, Defendant Bill G. King (the only remaining Defendant in this action and hereinafter referred to as “Defendant”) filed a response to Plaintiff’s motion. Plaintiff, on March 15, 1991, filed a reply memorandum in support of its motion. On March 29, 1991, Defendant filed a response to Plaintiff’s reply memorandum.

I. FACTUAL AND PROCEDURAL BACKGROUND.

The dispute in this matter revolved around a franchise agreement entered into by Plaintiff and Defendant for a motel located in Norcross, Georgia. Defendant signed the franchise agreement as a general partner of Norcross Econo-Lodge, Ltd. and as an individual guarantor.

On November 11, 1989, Plaintiff filed the complaint in this matter. Plaintiff sued Defendant in his capacity as an individual guarantor of the franchise agreement, and not in his role as a general partner. Plaintiff alleged that Defendant was liable to it for unpaid franchise fees in the amount of $70,629.63, plus attorney fees. On January 19, 1990, Defendant filed his answer raising the affirmative defenses of novation, waiver, estoppel, and release.

From November 14, 1990 through November 16, 1990, this Court presided over the trial of this matter to a jury. After the close of Defendant’s evidence, the Court granted Plaintiff’s motion for a directed verdict on the defenses of novation, waiver and estoppel. However, the Court denied Plaintiff’s motion for a directed verdict on the defense of release. The Court found Defendant’s evidence regarding the issue of release sufficient to go to the jury. That evidence indicated that Defendant believed that Plaintiff had released him from his obligations under the franchise agreement. The evidence also included a conversation between Defendant and Plaintiff’s President, Bob Weller, in which Mr. Weller reportedly told Defendant that he would not be sued for the non-paid franchise fees. Defendant further introduced several internal documents of Plaintiff which appeared to indicate that certain employees of Plaintiff believed that Defendant had been released from the agreement. Moreover, the franchise agreement incorporated into the complaint indicated that an employee of Plaintiff had stricken Defendant’s name from the cover sheet.

No issue was in dispute regarding whether Defendant would be liable if the jury failed to find that he had been released by Plaintiff from any obligations under the [399]*399franchise agreement. Therefore, the Court submitted two (2) questions to the jury. First, the jury was directed to answer the following question: “Did plaintiff Econo Lodges of America, Inc. release the defendant Bill G. King from his obligations under the Franchise Agreement?”. Only if the jury answered “No” to this question was it to go on to the second question which directed it to determine the amount of damages suffered by Plaintiff.

After deliberating for several hours, the jury answered the first question in the affirmative. Thus, the jury was not required to address the issue of damages. After the jury had been dismissed, Plaintiff moved for JNOV, and in the alternative, for a new trial. The Court directed the parties to file briefs in support of their respective positions. Having carefully considered the briefs, the Court believes Plaintiffs motions must be denied. The Court’s reasoning follows.

II. PLAINTIFF’S MOTION FOR JNOV.

A. Applicable Standard of Review.

Rule 50(b) of the Federal Rules of Civil Procedure is applicable for motions for judgment notwithstanding the verdict. That Rule provides in pertinent part:

Whenever a motion for a directed verdict made at the close of all the evidence is denied or for any reason is not granted, the court is deemed to have submitted the action to the jury subject to a later determination of the legal questions raised by the motion. Not later than 10 days after entry of judgment, a party who has moved for a directed verdict may move to have the verdict and any judgment entered thereon set aside and to have judgment entered in accordance with the party’s motion for a directed verdict; ... A motion for a new trial may be joined with this motion, or a new trial may be prayed for in the alternative. If a verdict was returned the court may allow the judgment to stand or may reopen the judgment and either order a new trial or direct the entry of judgment as if the requested verdict had been directed.

In ruling on a motion for judgment notwithstanding the verdict, the district court must determine whether sufficient evidence exists in the record as a whole upon which a reasonable fact finder properly could return a verdict in favor of the prevailing party. See Herold v. Hajoca Corp., 864 F.2d 317, 319 (4th Cir.1988); Gries v. Zimmer, Inc., 742 F.Supp. 1309, 1313 (W.D.N.C.1990). The court must view the evidence in the entire record in the light most favorable to the prevailing party. See Gries, 742 F.Supp. at 1313. All reasonable inferences from the facts presented at trial are made in favor of the non-moving party. Id. Moreover, the district court in considering a JNOV motion must not weigh the evidence nor assess the credibility of witnesses. Id.; see also Taylor v. Home Ins. Co., 777 F.2d 849, 854 (4th Cir.1985), cert. denied, 476 U.S. 1142, 106 S.Ct. 2249, 90 L.Ed.2d 695 (1986).

B. Legal Effect of Oral Release.

Plaintiff’s primary argument in support of its motion for a JNOV is that the purported release entered into by the parties was oral and not written as required by Virginia law.1 In support of its position, Plaintiff relies on the Virginia Supreme Court case of Sachs v. Owings, 121 Va. 162, 92 S.E. 997 (1917). In that case, the court noted that a contract under seal (such as the franchise agreement in this case) “can be modified or abrogated only by an instrument of equal dignity, i.e. by one under seal”. Id. 92 S.E. at 1000. However, Plaintiff has not cited to one other Virginia case extending the holding of Sachs.

Defendant, on the other hand, has cited to two cases which are in direct contradiction to Sachs. In Georgeton v. Reynolds, 161 Va. 164, 170 S.E. 741 (1933), the Virginia Supreme Court reversed the trial court’s decision to strike evidence of an [400]*400oral release. Id. 170 S.E. at 743. Although the court did not specifically overrule Sachs, the court nonetheless found that evidence of an oral release of a contract under seal should be considered by the jury. Id. at 744-45.

The Fourth Circuit also implicitly adopted the Georgeton holding in Reserve Insurance Co. v. Gayle, 393 F.2d 585 (4th Cir.1968).

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Bluebook (online)
764 F. Supp. 396, 1991 U.S. Dist. LEXIS 6353, 1991 WL 75393, Counsel Stack Legal Research, https://law.counselstack.com/opinion/econo-lodges-of-america-inc-v-norcross-econo-lodge-ltd-ncwd-1991.