MacRis & Associates v. IMAGES ATTITUDE

941 P.2d 636, 1997 WL 332525
CourtCourt of Appeals of Utah
DecidedJune 19, 1997
Docket960218-CA
StatusPublished

This text of 941 P.2d 636 (MacRis & Associates v. IMAGES ATTITUDE) is published on Counsel Stack Legal Research, covering Court of Appeals of Utah primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
MacRis & Associates v. IMAGES ATTITUDE, 941 P.2d 636, 1997 WL 332525 (Utah Ct. App. 1997).

Opinion

941 P.2d 636 (1997)

MACRIS & ASSOCIATES, INC., Plaintiff and Appellee,
v.
IMAGES & ATTITUDE, INC., a Utah corporation; and Thomas Mower, an individual, Defendants and Appellants.

No. 960218-CA.

Court of Appeals of Utah.

June 19, 1997.

*637 Dennis K. Poole and Andrea Nuffer, Dennis K. Poole & Associates, Salt Lake City, for Defendants and Appellants.

Stephen T. Hard, Roger D. Sandack, and Steven E. McCowin, Giauque, Crockett, Bendinger & Peterson, Salt Lake City, for Plaintiff and Appellee.

Before BILLINGS, JACKSON and ORME, JJ.

*638 OPINION

JACKSON, Judge:

Images & Attitude, Inc. (Images) appeals from the trial court's grant of partial summary judgment in favor of Macris & Associates, Inc. (M & A), dismissing Images's fraudulent inducement claim against M & A based on collateral estoppel, and from the trial court's judgment in favor of M & A on the remaining claims. We affirm.

BACKGROUND

Images is a multilevel marketing company which markets health and beauty products. In 1989, Thomas Mower, president of Images, entered into negotiations with Michael Macris, who was acting on behalf of two corporations: Affinity, Inc. (Affinity), a nail system manufacturing company, and M & A, a marketing company. As a result of these negotiations, Images entered into two related contracts: (1) a supply contract with Affinity, under which Affinity was to supply nail gels and lamp housings to Images for use in assembling nail care kits ("Affinity contract"), and (2) a distributorship contract with M & A, under which M & A was to market the nail products in Images's marketing program ("M & A contract"). Under the M & A contract, M & A was "autoqualified," which meant that the usual distributor requirements of the Images marketing plan were waived, and M & A was to be paid at the highest level provided for in the marketing plan without having to meet any of the usual qualifications for being compensated at that level. M & A was to be entitled to autoqualification status as long as M & A was "active in promoting Images and Images products."

A number of disputes then arose between the parties, including disputes over the nail gel Affinity was providing Images, to which several users had developed irritation problems, and over Michael Macris's testing of other nail gels. In March 1991, Images notified M & A that it was discontinuing M & A's autoqualification status for lack of activity. Later in that same month, Images notified M & A that it was considering terminating the M & A distributorship entirely.

In April 1991, M & A filed this action for breach of the M & A contract. Images counterclaimed, asserting, among other things, that M & A breached the M & A contract, that M & A was the alter ego of Macris, and that Macris fraudulently induced Images into entering into the M & A contract.

At about the same time M & A initiated this action, Affinity initiated an arbitration proceeding against Images, alleging breach of the Affinity contract. In May 1992, the arbitrator in that proceeding determined that Images had breached its contract with Affinity and awarded Affinity damages. This arbitration award was entered as a judgment in district court in June 1992. Images then filed a complaint in district court, alleging that it had been fraudulently induced into entering into the Affinity contract and asking that the arbitration award and judgment in Affinity's favor be set aside. In addition, Images filed arbitration proceedings against Affinity, also arguing in those proceedings that it had been fraudulently induced into contracting with Affinity. In November 1993, the arbitrator dismissed Images's fraudulent inducement claim on summary judgment.

Following the arbitrator's dismissal of Images's fraudulent inducement claim against Affinity, M & A moved for summary judgment on the fraudulent inducement claim in this litigation, arguing that Images's fraudulent inducement claim in this case was barred under the collateral estoppel doctrine. The trial court granted M & A's motion for summary judgment on the fraudulent inducement claim.

After a trial on the remaining issues, the trial court entered judgment in favor of M & A. The trial court concluded, among other things, that M & A did not materially breach the contract with Images, but that Images had materially breached the contract by discontinuing M & A's autoqualification status and by failing to pay M & A under the parties' contract. The trial court also concluded that M & A was not the alter ego of Macris. The trial court awarded M & A $360,681.20 plus interest in damages. Images appeals.

*639 ISSUES

On appeal, Images argues that the trial court erred in dismissing its fraudulent inducement claim on the basis of collateral estoppel. Images also asserts that the trial court erred in determining that M & A was not the alter ego of Michael Macris, or that Macris was not the agent of M & A, and that Macris's competitive activities were therefore not attributable to M & A. Finally, Images asserts that the trial court erred in excluding Images's witness, William Crismon, from testifying at trial.

ANALYSIS

I. Collateral Estoppel

Images first argues the trial court erred in dismissing Images's fraudulent inducement claim against M & A on summary judgment. Summary judgment is appropriate only where there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. See Utah R. Civ. P. 56(c). Because summary judgment presents only questions of law, we review the trial court's determinations under a standard of correctness, according no deference to the trial court's legal conclusions. See Cook v. Zions First Nat'l Bank, 919 P.2d 56, 59 (Utah.Ct.App.), cert. denied, 925 P.2d 963 (Utah 1996).

In dismissing Images's fraudulent inducement claim on summary judgment, the trial court concluded that Images was collaterally estopped from relitigating the fraudulent inducement claim against M & A based on the Affinity arbitration proceedings. The court specifically determined that "[c]ollateral estoppel applies to issues decided on summary judgment" and "to issues decided in arbitration proceedings." The court further found that "[t]he issue as to whether Mr. Macris fraudulently induced the Defendants has already been fully and fairly litigated in a prior arbitration proceeding" and "[t]he prior arbitration proceeding found that no fraudulent inducement had occurred."

Collateral estoppel, also referred to as issue preclusion, prevents the relitigation of issues raised, litigated, and resolved in a previous action. "Under this doctrine, the relitigation of factual issues that have once been litigated and decided is precluded even if the claims for relief in the two actions are different, and even if only `the party against whom the doctrine is asserted was a party or in privity with a party to the prior adjudication.'" Mel Trimble Real Estate v. Monte Vista Ranch, Inc., 758 P.2d 451, 453 (Utah. Ct.App.1988) (citation omitted) (emphasis in original).

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Macris & Associates, Inc. v. Images & Attitude, Inc.
941 P.2d 636 (Court of Appeals of Utah, 1997)

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Bluebook (online)
941 P.2d 636, 1997 WL 332525, Counsel Stack Legal Research, https://law.counselstack.com/opinion/macris-associates-v-images-attitude-utahctapp-1997.