Henry H. Stafford, Jr. v. Louis Puro, Robert D. Levin and Seena Puro, Co-Executors of the Estate of Arthur Puro, Deceased

63 F.3d 1436
CourtCourt of Appeals for the Seventh Circuit
DecidedOctober 25, 1995
Docket94-2611 and 95-1060
StatusPublished
Cited by45 cases

This text of 63 F.3d 1436 (Henry H. Stafford, Jr. v. Louis Puro, Robert D. Levin and Seena Puro, Co-Executors of the Estate of Arthur Puro, Deceased) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Henry H. Stafford, Jr. v. Louis Puro, Robert D. Levin and Seena Puro, Co-Executors of the Estate of Arthur Puro, Deceased, 63 F.3d 1436 (7th Cir. 1995).

Opinion

FLAUM, Circuit Judge.

After being terminated and denied payment of his salary, commissions, and expenses, Henry Stafford filed a multi-count diversity suit against his employer, Purofied Down Products Corporation, two of its owners and officers, Arthur and Louis Puro, and Stafford’s supervisor, Kenneth Mesnik. A jury found Arthur and Louis Puro liable for violating the Illinois Wage Payment and Collection Act (the “Wage Act”) and for tortiously interfering with the compensation agreement between Stafford and Purofied. The Puros challenge these verdicts, as well as the jury’s awards of emotional distress and punitive damages. We affirm in all respects except the award of exemplary damages, for which we order a new trial unless Stafford accepts a remittitur.

*1439 I.

Purofied Down Products Corporation, as its name suggests, manufactured down products. Louis owned 44% of the stock of Puro-fied, but later transferred his ownership in the corporation to the Louis Puro Family Trust, of which he was Trustee. His brother, Arthur, also owned 44% of Purofied, while another brother, Sam, owned the remaining 12%.

Henry Stafford began working for Puro-fied in 1979 as its Regional Manager of Midwest Sales and Special Markets. The corporation paid Stafford a yearly salary and a 1% commission on sales he generated. Stafford initially reported directly to Louis, the then Chairman of the Board. Beginning with Kenneth Mesnik’s hiring in 1987 as Executive Vice President, Stafford began reporting to Mesnik.

By 1985, Stafford’s sales totalled approximately $1.5 million per year. Beginning in 1985, Stafford attempted to establish relationships with several television shopping channels. He eventually landed an account with the Home Shopping Network (“HSN”). As a result of this success, Stafford’s sales rose to $1.8 million for the first five months of 1988, with projected sales of $9 million for the entire year. Although only Stafford had previously met with HSN representatives, Mesnik informed Stafford in early 1988 that Mesnik and another Purofied employee planned to meet with them and scheduled the meeting to occur while Stafford was on vacation.

In 1985, Purofied had gone through a Chapter 11 reorganization. By 1988, the corporation seemed to have rebounded and during that year generated sales of $30 million and consistently met its credit obligations. In 1988, Purofied paid $1 million for raw materials to Windsor Trading, a company owned by Arthur, and $200,000 for lease obligations to the Louis Puro Family Trust.

Despite Purofied’s performance, Stafford did not receive commissions for his 1987 sales, an amount equal to approximately 25% of his total yearly compensation. He requested payment from Mesnik, who promised Stafford he would receive a cheek in January, 1988. He did not. Over the next six months, Stafford sent several memoranda to Mesnik seeking payment. Mesnik testified at his deposition, a transcript of which was introduced at trial, that he spoke with the Puros after receiving many of Stafford’s memos. Stafford also sent a letter to Louis and one to Arthur, the latter letter specifically mentioning the financial difficulties Puro-fied’s delayed payment was causing Stafford. In response to these memoranda, Mesnik told Stafford that he would receive his money, but again, he did not. On May 3, 1988, Purofied gave Stafford a check for his commissions on first quarter, 1988 sales. Stafford could not cash the check, however, because Arthur and Louis had not signed it, as required for any Purofied draft over $1,000.

On August 1, 1988, Stafford attended a meeting at Purofied’s headquarters in New Jersey. Mesnik had once again promised him payment of 1987 and 1988 commissions, as well as reimbursement for past-due travel expenses. As before, Stafford failed to receive a check. After the strategy meeting, to which Stafford had brought all of his background information on HSN as requested, Stafford discussed the account with the Pu-ros and Mesnik. Later in the day, Mesnik congratulated Stafford on his work, toasted his new business, and told him that his cheeks would be delivered the next day.

Instead of paying Stafford on August 2, Mesnik fired him. Mesnik stated that he and the Puros had agreed on this action, indicating that the memoranda Stafford had written regarding his need for payment had irritated the Puros. Mesnik acknowledged that the company owed Stafford a substantial amount of money and stated that Purofied would pay him his 1987 commissions, travel expenses, and final month’s salary if he signed a release relinquishing his right to any other amounts, including those he had earned for completed, 1988 sales. Mesnik possessed checks for the promised amounts, but when Stafford refused to sign the release Mesnik told him that the Puros had instructed Mesnik to refuse to turn them over.

On September 30,1988, Stafford’s attorney sent letters to the Puros and Mesnik, requesting payment of all amounts Purofied *1440 owed his client. After receiving this correspondence, Louis questioned Mesnik about the situation. Mesnik responded that it was being taken care of, but Purofied did not tender payment. Stafford subsequently initiated this lawsuit against Purofied and the Puros. Stafford alleged that Purofied had breached his compensation agreement and converted his commissions, that the Puros had violated the Wage Act, had terminated his employment in bad faith, and had tor-tiously interfered with his compensation agreement and his business relationship with Purofied, and that the Puros were the alter egos of Purofied. Purofied filed for bankruptcy in 1990, thereby staying the actions against it. Stafford then added Mesnik as a defendant. Arthur died and Stafford substituted the co-executors of his estate, Robert Levin and Seena Puro, as defendants. The district court granted summary judgment for the individual defendants on Stafford’s bad faith termination claim and, on May 22, 1992, entered a default judgment against Mesnik, the subject of a separate appeal. Stafford v. Mesnik, 63 F.3d 1445 (7th Cir.1995).

The remaining counts went to trial before a Magistrate Judge and a jury. The jury found the Puros liable under the Wage Act and awarded Stafford $67,745. The jury also found that the Puros had tortiously interfered with the compensation agreement between Stafford and Purofied. It awarded Stafford $450,000 in emotional distress damages against Arthur and Louis, and $500,000 in punitive damages against Louis. Finally, the jury concluded that the defendants had not tortiously interfered with Stafford’s business relationship with Purofied. The Puros filed a motion for judgment notwithstanding the verdict or a new trial, which the court denied except to the extent that Stafford accepted a remittitur to $100,000 for emotional distress damages. This appeal followed.

II.

Arthur and Louis first argue that the verdict against them for violating the Wage Act cannot stand. Although Illinois law governs the substantive issues in this case, we use a federal standard to test the sufficiency of the evidence. Mayer v. Gary Partners & Co., Ltd., 29 F.3d 330

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Cite This Page — Counsel Stack

Bluebook (online)
63 F.3d 1436, Counsel Stack Legal Research, https://law.counselstack.com/opinion/henry-h-stafford-jr-v-louis-puro-robert-d-levin-and-seena-puro-ca7-1995.