Fruehauf Corp. v. Welch

519 So. 2d 502, 1988 Ala. LEXIS 14, 1988 WL 8662
CourtSupreme Court of Alabama
DecidedJanuary 15, 1988
Docket86-629
StatusPublished
Cited by1 cases

This text of 519 So. 2d 502 (Fruehauf Corp. v. Welch) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fruehauf Corp. v. Welch, 519 So. 2d 502, 1988 Ala. LEXIS 14, 1988 WL 8662 (Ala. 1988).

Opinion

BEATTY, Justice.

This is an appeal by co-defendant Frue-hauf Corporation (“Fruehauf”) from a judgment based on a jury verdict in plaintiff Donnell Welch’s action against Frue-hauf and Kenworth of Dothan, Inc. (“Ken-worth”), based on fraud. Fruehauf appeals from the trial court’s denial of its post-judgment motions for judgment notwithstanding the verdict or in the alternative a new trial or in the alternative a remittitur. We affirm.

In early April 1984, Donnell Welch went to the offices of Kenworth in order to purchase a dump trailer for his fertilizer and trucking business. He spoke with Gil Brannon, a salesman for Kenworth, and Tom Bledsoe, Kenworth’s president. Ken-worth was a “parts and/or truck equipment dealer” for Fruehauf, and Brannon recommended that Welch buy a Fruehauf trailer. Welch and Brannon had an understanding that this trailer was to be a new 1984 model trailer, the current year model.

At Welch’s request, Brannon attempted to locate a Fruehauf trailer that had the desired specifications, viz., a new dump trailer with a length of 30 to 33 feet. Brannon contacted Larry McRae, a regional sales representative for Fruehauf, and asked him to check on the availability of a new trailer with the appropriate specifications. Neither Brannon nor McRae disputes the fact that Brannon did not request a specific year model but merely asked for a “new” trailer. To Brannon, “new” meant “1984,” yet McRae testified that his definition of a “new” trailer is one that has “never been titled.”

At this point, the evidence adduced at trial conflicted sharply. According to Brannon, McRae called him back and told him that Fruehauf “had a new trailer sitting in Memphis, Tennessee.” Brannon testified that, although the model year was never mentioned, he assumed it was a 1984 model. On the other hand, McRae testified as follows:

“A. I called Gil [Brannon] back and I told him — I said, ‘This is what I’ve been able to find. These trailers are very close to what you have asked for, but they were manufactured in 1982,’ but I said, ‘The good news is they will have a lower price than I could sell you a 1984 model for.’
“Q. What did he say?
“A. He told me then — he said, ‘That is good, because the customer wants the trailer to meet the specifications that he’s asked for, but he’s also hunting a low price.’ ”

While McRae argues that he offered Brannon a 1982 trailer at a discount of about $2,500, Brannon contends that McRae never mentioned either the purported discount or the specific model year.

In order to locate this particular trailer in Fruehauf’s widespread inventory, McRae examined a “new trailer availability report.” This document revealed that Frue-hauf's Memphis branch had a 33-foot dump trailer in stock that had the serial number 4CF-003003. The report also showed that this trailer was a 1982 model.

After McRae told Brannon that he had located a trailer, Brannon met with Welch to discuss the financing arrangements and the trailer’s specifications. During this meeting, Brannon and Welch each spoke with McRae over the telephone in order to [504]*504get more information about the trailer. Welch testified that he told McRae that he wanted a new 1984 model dump trailer with its improved features. According to Welch, McRae stated that the trailer in question was a “new” trailer but never mentioned a specific model year. McRae testified that he did not remember talking to Welch but did not rule out the possibility that he did.

After these discussions, Welch decided to purchase the trailer, with Kenworth buying it from Fruehauf and simultaneously reselling it to Welch. This transaction occurred on April 18, 1984, with an exchange of documents between Kenworth and Frue-hauf’s New Orleans branch office. Among the documents received by Kenworth was a Manufacturer’s Certificate of Origin (“MCO”) and an equipment invoice prepared by a clerk in the New Orleans office of Fruehauf. The MCO described the trailer, gave the vehicle identification number (“VIN”), and stated that the year of manufacture and the model year were both 1984. The clerk testified that McRae had given her most of the information regarding the trailer over the telephone, but claimed that her designation of the trailer as a 1984 model was a clerical error and that McRae never told her that it was a 1984 trailer. On cross-examination, however, she conceded that she did not remember the actual conversation that she had with McRae.

Thereafter, Welch sent a driver to pick up the trailer directly from Fruehauf’s branch office in Memphis. Although the trailer was never in Kenworth’s possession, Kenworth did file an application for certificate of title with the Alabama Department of Revenue on behalf of Welch. This application stated that the trailer was a 1984 model and that the VIN was 1H4D03328CF003003. Tom Bledsoe of Kenworth testified that he relied on the MCO in completing the application for title.

Several weeks later, the Department of Revenue sent Kenworth a request for corrected documents, stating that the model year cited on the application and the MCO did not match the correct model year as revealed by the VIN. Unknown to Ken-worth and Welch, the VIN contained a code that established that the trailer was of 1982 vintage. The tenth position in the alphanumeric VIN stands for the model year; “A” designates a 1980 model, “B” designates a 1981 model, and “C” designates a 1982 model, etc.1 Kenworth immediately informed Welch that his trailer was actually a 1982 model. Thereafter, Ken-worth requested a new MCO from Frue-hauf but later withdrew the request.

Over the next several months, Welch had to replace several rubber items on the trailer because they had deteriorated in storage. These purchases totaled $3,068.08 and included four new tires, air hoses, rubber grommets, and hydraulic seals. In addition, several witnesses testified as to the difference in value between a new 1984 model trailer and a “new” (unused) 1982 model trailer at the time of Welch’s purchase. The estimates ranged from $3,000 to $6,000, not including any parts needing to be replaced.

On September 27, 1984, Welch filed this action against Kenworth based on fraud. In its answer, Kenworth joined Fruehauf as a third-party defendant, and Welch later amended his complaint to state a claim in fraud against Fruehauf as well. Fruehauf then filed a cross-claim against Kenworth. The case proceeded to trial before a jury, which returned a verdict in favor of Welch and against Fruehauf in the amount of $109,000; $9,000 compensatory and $100,-000 punitive damages. In addition, the jury found for the third-party defendant on Kenworth’s third-party complaint and for the cross-defendant on Fruehauf’s cross-claim. Judgment on the verdict was entered, and Fruehauf’s post-judgment motions were denied. This appeal followed.

Two issues are presented for our review:

[505]*505(1) Did the trial court err in denying Fruehauf s motions for directed verdict and judgment notwithstanding the verdict?

(2) Did the trial court err in upholding the jury’s award of punitive damages?

I.

Fruehauf first argues that the trial court erred in denying its motions for directed verdict and judgment notwithstanding the verdict.

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Bluebook (online)
519 So. 2d 502, 1988 Ala. LEXIS 14, 1988 WL 8662, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fruehauf-corp-v-welch-ala-1988.