Service Publications, Inc. v. Goverman

487 N.E.2d 520, 396 Mass. 567
CourtMassachusetts Supreme Judicial Court
DecidedJanuary 17, 1986
StatusPublished
Cited by86 cases

This text of 487 N.E.2d 520 (Service Publications, Inc. v. Goverman) is published on Counsel Stack Legal Research, covering Massachusetts Supreme Judicial Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Service Publications, Inc. v. Goverman, 487 N.E.2d 520, 396 Mass. 567 (Mass. 1986).

Opinion

Nolan, J.

For approximately twenty-five years prior to 1978, William Goverman operated, quite successfully, a magazine subscription business, American Magazine Service Company (AMSC), which evolved into a sole proprietorship. AMSC solicited subscriptions nationwide to two magazines published by the plaintiff Service Publications, Inc. (SPI), for the beauty salon and barbershop industry. This activity was conducted within the “trade division” of AMSC. The “consumer division” of AMSC solicited subscriptions to nationally distributed magazines such as Time, Life, Newsweek and many more.

For many months from September of 1978, Goverman and representatives of SPI carried on negotiations for the sale of AMSC. SPI charged that during these negotiations Goverman misrepresented the pre-tax profit of his business and the number *569 of sales persons on his force. Additionally, SPI alleges, Gov-erman failed to provide to SPI, upon request, accounting statements and tax returns for the business. Documents expressing the understanding of both Goverman and SPI to terms of an agreement of sale were exchanged. The year 1979 found the parties operating under a new agreement far more favorable to SPI and more onerous to AMSC than any earlier agreement. Finally, Goverman decided to sell and he became an employee of SPI after selling both his “trade division” and “consumer division” to SPI.

Goverman’s authority to run the business was severely restricted and troubles arose almost immediately between Gov-erman and SPI. Sales in the “trade division” dropped dramatically and a resultant reduction in income to SPI followed. Charges and counter charges were hurled between the parties. In particular, SPI charged Goverman with selling magazine subscriptions to students in violation of SPI’s policy against such practices because of the negative effect that student subscriptions had on the magazines’ advertising potential. SPI also claimed that Goverman was providing consulting services to a potentially competing magazine, “Trend,” although that magazine was never published and eventually filed for bankruptcy. Additionally, Goverman was charged with selling “advance subscriptions” or renewals in advance of the expiration date of the existing subscriptions, in violation of an agreement between the parties. Goverman, on the other hand, complained that SPI failed to pay commissions on time and that, as a result of such practices, Goverman lost subscriptions and valuable sales agents. Because of these troubled waters, SPI terminated Goverman’s employment on June 11, 1980.

SPI commenced an action on July 15,1980. SPI’s substituted complaint, filed December 3, 1980, contained four counts: breach of contract (Count I); deceit (Count II); violation of G. L. c. 93A (Count III); and usurpation of a corporate opportunity (Count IV). SPI amended its substituted complaint to add a count for wrongful interference with contractual relations. This count was later voluntarily dismissed.

*570 Goverman responded with an answer raising certain defenses (the material ones will be treated in this opinion) and a counterclaim in four counts: breach of contract against SPI 2 ; injunc-tive relief; violations of G. L. c. 93A against SPI; and intentional infliction of emotional distress. 3 The claim for injunctive relief was not acted upon because of a stipulation of the parties and the claim for intentional infliction of emotional distress was dismissed prior to trial. Goverman filed a motion for “partial summary judgment” on Counts I, II, and III of the complaint of SPI. It was denied.

After two and one-half weeks of trial, the jury returned a verdict for SPI on its breach of contract count and awarded it nominal damages ($1.00). The jury found for SPI on the G. L. c. 93A claim in the amount of $15,000, and found for Gover-man on the counts for deceit and usurpation of a corporate opportunity.

As to Goverman’s counterclaims, the jury found for Gover-man for breach of contract in the amount of $465,000. The jury found for SPI on Goverman’s c. 93A claim. Numerous posttrial motions were filed by the parties. The trial judge allowed SPI’s motion for judgment notwithstanding the verdict with respect to Goverman’s verdict for breach of contract. The judge reserved his decision on SPI’s motion for new trial, pending appellate review of the judgment notwithstanding the verdict. In the alternative, he ordered a remittitur on Gover-man’s verdict for breach of contract, in the amount of $160,000 conditional upon Goverman’s acceptance of it within twenty days. In the event that Goverman rejected the remittitur, SPI would be entitled to a new trial on the issue of damages. The *571 remittitur was also contingent upon our decision with respect to the judgment notwithstanding the verdict.

The judge awarded double damages and attorneys’ fees on SPI’s c. 93A claim. He denied SPI’s motion for additurs on the breach of contract and c. 93A verdicts. Both parties have appealed the judge’s rulings. We transferred the case to this court on our own motion. We shall identify the issues as we raise and decide them.

1. Judgment notwithstanding the verdict. At the close of SPI’s evidence and again at the close of all the evidence, Goverman moved unsuccessfully for a directed verdict. SPI also moved without success for a directed verdict on Gover-man’s counterclaim. After the jury returned a verdict of $465,000 for Goverman on his counterclaim for breach of contract, SPI moved for judgment notwithstanding the verdict, or in the alternative for a new trial, pursuant to Mass. R. Civ. P. 50 (b), 365 Mass. 814 (1974). The judge allowed the motion for judgment notwithstanding the verdict, 4 and reserved his decision on the motion for a new trial pending appellate review of the judgment notwithstanding the verdict.

In reviewing the judge’s allowance of the motion for judgment notwithstanding the verdict, we apply the same standard as we would apply for a review of a motion for directed verdict. 5 D’Annolfo v. Stoneham Hous. Auth., 375 Mass. 650, 657 (1978). That standard is whether “anywhere in the evidence, from whatever source derived, any combination of circumstances could be found from which a reasonable inference could be drawn in favor of the [defendant].” Poirier v. Plymouth, 374 Mass. 206, 212 (1978), quoting Raunela v. *572 Hertz Corp., 361 Mass. 341, 343 (1972). If any valid basis exists for allowing a judgment notwithstanding the verdict, we shall affirm the allowance, even if the judge based his decision on an erroneous principle. Ezekiel v. Jones Motor Co., 374 Mass. 382, 390 (1978).

The judge here allowed SPI’s motion, adopting SPI’s contention that, “[bjecause the defendant (Goverman) was found to be in breach on Count I of plaintiff’s complaint, he cannot recover on his counterclaim for breach of contract,” citing Sipley v. Stickney, 190 Mass. 43, 46 (1906).

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Bluebook (online)
487 N.E.2d 520, 396 Mass. 567, Counsel Stack Legal Research, https://law.counselstack.com/opinion/service-publications-inc-v-goverman-mass-1986.