Gerich v. General Motors Corp.

588 S.W.2d 107, 1979 Mo. App. LEXIS 2517
CourtMissouri Court of Appeals
DecidedSeptember 4, 1979
DocketNo. KCD 30081
StatusPublished
Cited by4 cases

This text of 588 S.W.2d 107 (Gerich v. General Motors Corp.) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gerich v. General Motors Corp., 588 S.W.2d 107, 1979 Mo. App. LEXIS 2517 (Mo. Ct. App. 1979).

Opinion

KENNEDY, Judge.

Plaintiff Milan Gerich had a verdict against defendant General Motors in the sum of $37,348, based upon his claim of fraudulent misrepresentations made by defendant General Motors to plaintiff by which plaintiff was induced to purchase the assets of the Hicks Brothers Chevrolet dealership in Kansas City. The purchase of the assets was actually made by Milan Chevro[108]*108let, Inc., a newly formed corporation, in which plaintiff had invested $50,000 and of which he was president and managing officer. His $50,000 investment was represented by non-voting Class “B” common stock. The balance of the capitalization, $550,000, was contributed by General Motors and was divided equally between all the Class “A” voting stock of the corporation and long-term promissory notes. The business was unsuccessful and was liquidated within only a few months, resulting in a loss to Gerich of $50,000, the entire amount of his initial contribution. The General Motors loss upon liquidation was $379,277.86.

Plaintiff blames his losses upon the fact that Hicks Brothers Chevrolet, Inc., on June 1, after its sale to plaintiff on March 14, 1974, entered a suburban Chevrolet dealership in competition with Milan Chevrolet.

Plaintiff claimed that the fraudulent representations which General Motors made to him, and which induced him to enter into the ill-fated venture, were, in the language of plaintiff’s verdict-directing instruction, “A. That Hicks Brothers Chevrolet, Inc., would not get another General Motors franchise . . . or B. That the Hicks Brothers financial statements given to plaintiff presented a true statement of the performance of the company as to fleet sales made in the ordinary course of business . . ."

Hicks Brothers Chevrolet, Inc., had been a party to the action, but it had been dismissed from the suit upon the payment of a $10,000 settlement figure.

The case comes to us on appeal on a single point, i. e., that the court erred in denying defendant’s motion for a directed verdict in that the evidence failed to make a submissible case of fraud. As against such a claim, we do not review the evidence to make our own independent judgment upon the facts. We review it to ascertain only if there was substantial evidence to support the verdict of the jury. We consider only the evidence, and the reasonable inferences therefrom, which tend to support the verdict. That evidence is excluded from consideration which is contrary to the verdict. Ackmann v. Keeney-Toelle Real Estate Co., 401 S.W.2d 483 (Mo. banc 1966); Lesser v. Rubin, 548 S.W.2d 860 (Mo.App.1977); Clark v. McCloskey, 531 S.W.2d 36, 37 (Mo.App.1975).

Furthermore, the verdict and judgment are to be upheld against defendant’s motion for a directed verdict if the evidence supports either of the disjunctive propositions submitted to the jury, even though it might not support the other. DeLay v. Ward, 364 Mo. 431, 262 S.W.2d 628, 630 (banc 1953); Ashton v. Buchholz, 359 Mo. 296, 221 S.W.2d 496, 502 (1949); Hammon v. Gentemann, 423 S.W.2d 5, 7 (Mo.App.1967).

We conclude that plaintiff made a sub-missible case on the first of the above submissions, i. e., that defendant represented that Hicks Brothers would not get another General Motors franchise, and we therefore affirm the judgment. This is not to hold he did not make a prima facie case on the second ground submitted.

The Hicks Brothers Chevrolet dealership at 1601 McGee in Kansas City was owned by a corporation in which the Hicks Brothers, Bill and Ben, were non-voting common shareholders and managers. General Motors, however, or Motors Holding, owned all the voting stock of the corporation, and also was a creditor upon long-term notes of the corporation. Motors Holding was an operating division of General Motors and was the arm of the company which financed dealerships selling General Motors automobiles. The five directors of the corporation were: The two Hicks brothers, and three employees of General Motors, namely, E. W. Broome, Kansas City branch manager for Motors Holding Division; Park Price, III, investment manager for Motors Holding; and R. A. Trent, western regional manager for Motors Holding.

For reasons hereafter explained, General Motors had determined that the Hicks Brothers Dealership was to be sold. The Hicks brothers, Bill and Ben, had resisted the sale and indeed had expressed a desire to buy out the General Motors investment and continue the operation of the dealership. For reasons difficult to understand, General Motors had turned them down.

[109]*109The history that led to the decision to sell the dealership was as follows: General Motors auditors had discovered during an audit of the corporate books for the period of January 1, 1973-April 30, 1974, that there was a $53,000 shortage. The Hicks brothers, confronted with the audit report at a special directors’ meeting August 29, 1974, at first explained to the directors that this money had been used as payments to influence employees of purchasers of automobile fleets. At one place in the evidence the payments are referred to as “birddog fees”.

At an October 1 directors’ meeting, the brothers were asked to “disassociate themselves from the dealer company”. They asked if they could instead be permitted to retire the General Motors investment, and were advised that this would not be permitted. After this meeting, the brothers Hicks reported that about $30,000 of the $53,000 (which they previously had said had been paid to persons representing fleet customers) had actually been used to pay a personal promissory note owing by them to their predecessor owner of the dealership, and an additional $1,200 had been used to pay, or pay on, a loan from Bill Hicks to Ben Hicks. Presumably the remaining $21,800 had been used, as they had earlier explained, to influence fleet customers’ employees.

Director Trent at a directors’ meeting the next day, October 2, stated, as disclosed by minutes of the meeting, that the recommended selling procedure was to “request the Car Division in writing to assist in finding a buyer for the company’s assets and the company be liquidated through sale and an orderly process, their peers in the automobile business or anyone else would not be aware of anything other than that they had voluntarily requested to sell the assets of the company.” Mr. Trent reminded the brothers Hicks that embezzlement was a felony. Both brothers assured the directors that they had no intention of being disagreeable or unreasonable and would cooperate fully with the directors’ recommendation.

The Hicks brothers appealed the directors’ decision to sell to Mr. William Harvey, III, who was the general manager of the Motors Holding Division of General Motors. They met with him at Detroit on October 4. They offered to buy out the Motors Holding’s investment in Hicks Brothers Chevrolet. This request was unavailing, however, Harvey explaining that Motors Holding’s investment could be retired only through dealership profits. The decision to sell stood unchanged.

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Bluebook (online)
588 S.W.2d 107, 1979 Mo. App. LEXIS 2517, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gerich-v-general-motors-corp-moctapp-1979.