Rowe International, Inc. v. J-B Enterprises, Inc.

Citations: 647 F.2d 830; 32 U.C.C. Rep. Serv. (West) 446; 1981 U.S. App. LEXIS 13553Docket: 80-1312

Court: Court of Appeals for the Eighth Circuit; May 6, 1981; Federal Appellate Court

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Rowe International, Inc. filed a diversity suit against J-B Enterprises, Inc. to recover the outstanding balance on vending machines purchased under eight installment contracts that included acceleration clauses for defaults. J-B counterclaimed for breach of implied warranties and misrepresentation, along with incidental and consequential damages. The case involved the sale of two models of can soda vending machines (Model 400 and Model 460), manufactured by Victor Products, which began experiencing problems due to changes in can manufacturing. While the machines functioned well with thicker-walled cans, issues arose with thinner-walled cans, leading to jamming. Rowe independently developed a new vending mechanism to address these problems and decided to discontinue distribution of Victor machines. J-B initially purchased 21 Model 460 machines in 1974, followed by a Model 400 in 1975, which had some jamming issues. In 1976, J-B ordered 75 additional machines, which were delivered over the year but did not include the new ejectors. J-B halted its vending operations in October 1977 after its employees voted to unionize, selling the business to Kay C and D.E.B., with Rowe's consent to sell the mortgaged equipment. The new buyers disclaimed any implied warranties. Despite selling most machines, J-B continued to make partial payments to Rowe, totaling $5,938.58, but did not fully settle the account. At trial, J-B retained six machines while selling ten elsewhere.

The jury was presented with four verdict forms related to both the complaint and counterclaim, ultimately finding in favor of Rowe on both claims, awarding Rowe $17,704. J-B appeals this verdict, arguing the trial court incorrectly denied its motion for a directed verdict. J-B claims that evidence showed the machines lacked a revised ejector mechanism, which Rowe was aware would cause jamming, and that J-B had repeatedly notified Rowe about these issues, relying on Rowe's assurances for resolution. J-B asserts that under R.S.Mo.1969 § 400.2-608, it was entitled to revoke acceptance of the machines in June 1978 due to their nonconformity, which substantially impaired their value. The statute outlines conditions under which a buyer may revoke acceptance and indicates that whether such revocation occurs within a reasonable time is typically a jury question. The court concluded that the trial court acted correctly in denying J-B’s directed verdict motion.

Additionally, J-B contends the trial court erred by not instructing the jury on its claims for fraudulent misrepresentation and punitive damages. J-B's requested instruction stated that if Rowe misrepresented its ability to service the vending machines, knowing the claims were false or being ignorant of their truth, and if J-B relied on these misrepresentations to its detriment, the jury should find for J-B. Missouri law defines fraud's essential elements, which include a false representation, intent to deceive, reasonable reliance by the hearer, and resulting injury.

A claimant's failure to prove any element essential to recovery is detrimental to their case, as established in Bauer v. Adams. J-B's recovery theory relies on Brennaman v. Andes, which mandates that to prove fraud through misrepresentation of intent, the claimant must show that the promissor lacked intention to perform at the time the agreement was made. Mere promises or opinions are not actionable. The focus of the case is whether evidence indicates a present intent not to perform when the agreement was formed. Intent to deceive can be demonstrated through direct or circumstantial evidence, but merely failing to perform does not suffice to establish this intent. A party cannot create a submissible case based on inferences that contradict their direct evidence.

Michael Strebler testified regarding Bob Thomason's assurances of service quality, which was upheld during Thomason's management. After Thomason's death in 1975, Marvin Menefee became the manager and assured Strebler of an unconditional one-year guarantee on 75 purchased machines in 1976. Although repairs were occasionally delayed, there was no evidence that Rowe intended not to fulfill their obligations at the time the agreements were made. Thus, the trial court's denial of J-B's requested punitive damage instruction was upheld.

Regarding jury instructions, J-B's failure to specifically object to instructions 2 and 9, and consent to modifications of 9 and 10, resulted in waiver of any errors unless they constituted plain error affecting the trial's fairness. The court found the amendments to instructions 9 and 10 to be minor and that instructions 2 and 3, while not perfectly correct, did not prejudice the defendant. Consequently, the court affirmed the trial court's decisions concerning jury instructions.

The trial court's decision to send the jury back for further deliberation after receiving inconsistent verdicts was upheld, as both parties' attorneys consented to this procedure. The court is permitted to allow the jury to correct mistakes in the verdict before finalizing it. J-B's claim that the court failed to show verdict forms to the attorneys was deemed meritless since no request was made for such a review. Additionally, J-B's challenge regarding the exclusion of testimony from Donald Block was rejected because the trial court acted within its discretion, and J-B's attorney did not formally object as required. The court also properly excluded testimony from Michael Strebler concerning lost vending machine locations due to a lack of supporting evidence and pretrial disclosure. Strebler's testimony regarding service call costs was eventually admitted, negating any potential prejudice to J-B. Lastly, allegations of jury misconduct were dismissed as J-B failed to report these issues promptly and thus waived its right to object. The judgment of the trial court is affirmed.