10 days notice was given. para. 18 of Stipulation and Order. In return, Rimar, Pier 7, and the Martins agreed inter alia, to release CCBL from liability by reason of CCBL's previous actions. See para. 10 of Stipulation and Order. In addition, the Martins agreed to provide a $250,000. personal guaranty for the obligations of Rimar and Pier 7. See para. 16 of Stipulation and Order.
Notwithstanding the agreements set forth in the Stipulation and Order, disputes continued to arise between the parties. The disagreements centered upon CCBL's procedures in determining the collateral value of accounts receivable and inventory under the loan agreements. The net result of CCBL's actions was to reduce the availability of funds which Rimar could borrow. Because they were unable to continue as viable enterprises in the absence of this financing, Rimar and Pier 7 filed petitions under Chapter XI of the former Bankruptcy Act on January 12, 1976.
In March, 1976, CCBL filed the present action against Mr. and Mrs. Martin alleging that because of the failure of Rimar and Pier 7 to repay their obligations timely, the Martins were indebted to CCBL in the amount of $250,000. under the terms of their personal guaranty of September 12, 1975. In response, the Martins filed a counterclaim, alleging that during the period of September 12, 1975, to January 12, 1976, CCBL had tortiously violated the terms of the Stipulation and Order in a deliberate attempt to harass and cause financial difficulty to Rimar. The defendants alleged that as a result of CCBL's actions, they suffered substantial damages.
Throughout this entire period, Rimar, Pier 7, and the Martins were represented by Paul Rosen, Esquire. Mr. Rosen counselled and advised them during the continuing problems with CCBL. He wrote letters, made phone calls, and had personal conferences. He appeared in court on behalf of Rimar and the Martins. It was Mr. Rosen who negotiated the settlement of the prior action. He was in constant, often daily contact with the Martins and was intimately acquainted with all that took place. He knew of the difficulties between the Martins and CCBL, not second hand or in broad outline, but first hand and in detail. Unfortunately, he was also their trial counsel in the present case.
II. Motion for Judgment Notwithstanding the Verdict
CCBL has asserted three grounds in support of its motion for judgment notwithstanding the verdict: first, as a shareholder and officer of Rimar, Martin may not maintain an individual action against CCBL for what amounts to a primary wrong to the two corporations (Rimar and Pier 7); second, that the defendants failed to prove that during the period of September 12, 1975, through January 12, 1976, CCBL had engaged in any tortious conduct; finally, that Martin failed to establish any link between CCBL's conduct and his alleged damages. Each contention is without merit.
With regard to the first issue, CCBL asserts that Martin, in his capacity as a stockholder and officer of Rimar, lacks standing to maintain this action. CCBL contends that a claim for breach of a contract with a corporation or for the tortious impairment of its business is vested solely with the corporation, not its stockholders or officers. I have no quarrel with this statement of the law. See e.g., Pitchford v. Pepi, Inc., 531 F.2d 92, 97 (3d Cir. 1975), cert. denied, 426 U.S. 935, 49 L. Ed. 2d 387, 96 S. Ct. 2649 (1976); Kauffman v. Dreyfus Fund, Inc., 434 F.2d 727, 732 (3d Cir. 1970), cert. denied, 401 U.S. 974, 28 L. Ed. 2d 323, 91 S. Ct. 1190 (1971); ITT Diversified Credit Corp. v. Kimmel, 508 F. Supp. 140, 143-45 (N.D.Ill. 1981); Commercial Credit Development Corp. v. Scottish Inns of America, Inc., 69 F.R.D. 110, 116-17 (E.D. Tenn. 1975). This is, however, not the basis upon which Martin's claim is predicated. Martin has standing to maintain this action because he was a party to the September 12, 1975, Stipulation and Order, the terms of which he has alleged CCBL breached with the deliberate intent of causing injury to him. As such, Martin has an independent basis upon which to bring this action, separate and apart from his status as president and shareholder of Rimar.
See, e.g., Buschmann v. Professional Men's Association, 405 F.2d 659, 662 (7th Cir. 1969); Stewart Coach Industries, Inc. v. Moore, 512 F. Supp. 879, 888 (S.D. Ohio 1981).
CCBL also argues that judgment n.o.v. must be granted because Martin failed to prove that between the period of September, 1975, and January, 1976, CCBL had engaged in any tortious conduct. Viewing the evidence in a light most favorable to Martin, I find that there is substantial evidence to support the jury's determination that CCBL violated the terms of the Stipulation and Order with the specific intent of causing injury to him.
Finally, CCBL asserts that Martin failed to establish any connection between its post-stipulation actions and his injuries. I disagree. The record adequately supports the jury's finding that as a result of CCBL's refusal to provide sufficient additional financing to which Rimar was entitled under the terms of the Stipulation and Order, Rimar was unable to meet its operating expenses and therefore was forced to file for bankruptcy on January 12, 1976. Consequently, Martin's substantial stock holdings in Rimar were rendered worthless, he became personally liable for numerous other corporate debts and Rimar's outstanding taxes, and his home and other properties were sold at sheriff's sale. In addition, I cannot say that the jury's award of punitive damages is without foundation. In sum, viewed in a light most favorable to the defendant, the evidence is sufficient to support the jury's award of both compensatory and punitive damages.
III. Motion for a New Trial
Despite my conclusion that no adequate grounds exist for entering a judgment notwithstanding the verdict, I am forced to grant a new trial. This result is unfortunate because this action has already consumed an inordinate amount of the parties', counsels', and the court's time and resources. However, due to defense counsel's wholly improper conduct, this result is inescapable.
During the course of this protracted trial, I found it necessary to admonish counsel repeatedly for his continuous pattern of misbehavior. Among his more serious transgressions were his insistence on testifying, his persistence in stating his personal opinions regarding witnesses' testimony, and his repeated aspersions directed towards opposing counsel. Counsel's behavior was particularly egregious during his summation. In reviewing the record, I have noted at least 23 instances of improper statements in this relatively brief span. Again, these comments include testifying in the guise of arguing (Tr. 32-79; -93; -229; -231), giving his personal opinion regarding the justness of his clients' case (Tr. 32-33; -103; -104; -105; -113; -125; -126; -229; -232; -238), interjecting his views about the credibility of witnesses and their testimony (Tr. 32-70; -76; -77; -80; -99; -231), and making reference to the size and resources of CCBL (Tr. 32-229; 231; -233). Counsel's improprieties began with his initial remarks to the jury, ("Now you have to understand that I really believe that Mr. Martin is right and so forth." Tr. 32-33), and continued unabated throughout his closing speech. Counsel later stated, "I say no one has the right to use credit practices the way they did. . . . I say they had no right to harass him. I say the behavior is outrageous. . . . That's outrageous behavior. It's horrible behavior. It's up to you to stop it. It's up to you to right it." (Tr. 32-125 to 126). While a litigant has a right to expect his attorney to argue forcefully based upon the evidence, counsel went far beyond the facts and proffered his sentiment about CCBL's actions.
Such opinions were uncalled for and should not have been placed before the jury.
Moreover, counsel's expression of indignation and outrage could only serve to lead the jury away from a decision based upon a fair and impartial review of the evidence.
After counsel had concluded his summation and prior to his rebuttal, I admonished him outside the presence of the jury for his conduct. (Tr. 32-139 to 141). Notwithstanding my warning, counsel's improper remarks continued with renewed vigor during his rebuttal. Illustrative of his actions is the following excerpt where he succeeded in combining several improper comments:
With respect to Mr. Martin's dreams, I think he has a right to them. I think that if he had dreamed about where his company was going to be bigger than the Army, he has a right to that dream, and I don't believe because Commercial Credit has lots of money and because they are rich they have a right to take that dream. I don't believe it.