On Appeal from the United States District Court for the Eastern District of Pennsylvania, D.C. No. 86-6634.
Seitz, Hutchinson and Garth, Circuit Judges.
The plaintiff/appellee, Eugene F. Kinnel ("Kinnel"), brought this action against defendants/appellants, Mid-Atlantic Mausoleum, Inc. ("Mid-Atlantic") and John E. Kennan ("Keenan"), seeking damages for breach of contract and for fraudulent misrepresentation.*fn1 Trial was bifurcated between liability and damages. With respect to liability, the jury, in response to written interrogatories, found against Mid-Atlantic.*fn2 No questions regarding Kennan's individual liability were included in the interrogatories submitted to the jury, and thus the jury returned no findings with respect to Kennan.
Despite the fact that the jury only found liability against Mid-Atlantic, the district court entered judgment against both Mid-Atlantic and Kennan in its May 5, 1987 order. Thereafter, in a two-day trial to determine damages, the jury found against both Mid-Atlantic and Kennan and awarded $274,000 in compensatory and $50,000 in punitive damages against Mid-Atlantic and $15,000 in compensatory and $10,001 in punitive damages against Kennan personally.
Keenan and Mid-Atlantic then filed a number of post trial motions including motions for a judgment notwithstanding the verdict and a new trial. The district court denied these motions by an opinion and order entered July 27, 1987.
On appeal, Mid-Atlantic and Kennan, present us with a multitude of claimed errors which implicate the district court's charge, the jury's verdict and the district court's judgments. Mid-Atlantic and Kennan also raise questions with respect to sufficiency of the evidence, but those questions, which we address at the outset, do not require as extensive an analysis and discussion as do the post-evidence issues.*fn3
We conclude that there was sufficient evidence to support the jury's verdict against Mid-Atlantic, but hold that the district court erred when it entered judgment against Kennan. We also hold that the district court erred in its instructions regarding damages. Thus, we reverse and remand the case to the district court with instructions to enter a judgment in Kennan's favor and to hold a new trial on Mid-Atlantic's damages.
Mid-Atlantic is in the business of building mausoleums. Kennan is the president of Mid-Atlantic. Kinnel was a sales contractor, selling mausoleum crypts, grave cites and markers. (A202). The jury found that Kinnel was engaged by Mid-Atlantic as an independent contractor to assist in finding mausoleum projects and in selling crypts in those mausoleums. (A117-18). Kinnel testified, and the jury found, that pursuant to an oral contract he entered into with Mid-Atlantic in 1982, he was to receive a finder's fee of 3% for each mausoleum project he found for Mid-Atlantic and a 25 to 40% commission for each crypt he sold in a Mid-Atlantic mausoleum. (A117-18, 212-13). The liability interrogatories and the jury's answers to each are set out in the margin.*fn4
The commission paid a sales agent was typically part of the contract price negotiated by Mid-Atlantic with its customer. This arrangement reflected the financing agreements Mid-Atlantic often arranged, whereby construction costs were paid with pre-construction sales of crypts, thus making Mid-Atlantic also responsible for sales. (A219-20, 223, 232-33, 751). Mid-Atlantic would hire Kinnel to make the pre-construction crypt sales for proposed Mid-Atlantic projects. (A215-16, 751-52). Kinnel would receive the sales commissions called for in the building contract as his compensation. If Kinnel did not sell enough crypts to justify the project, construction would not begin, the money advanced would be returned, and Kinnel would not be entitled to his commissions. Kinnel testified that this had never happened on sales projects that he had managed. (A253).
The issues on this appeal arise primarily from two mausoleum projects referred to by the parties as the St. Anthony's project and the St. Joseph's project. In his complaint Kinnel alleged, inter alia, that Mid-Atlantic had breached its contract with him by not paying him his finder's fees for the St. Anthony's and St. Joseph's projects; that Mid-Atlantic had further breached its contract with him by firing him as a salesperson for the St. Anthony's project and thus depriving him of his St. Anthony's sales commissions; and that Mid-Atlantic and Kennan misrepresented to Kinnel the commission levels set by the contracts for four Mausoleum projects including the St. Anthony's and St. Joseph's projects, thus inducing Kinnel to accept lower commissions on his sales.
The jury found: that Mid-Atlantic had breached its contract with Kinnel on both the St. Anthony's and the St. Joseph's projects by not paying the finder's fees; that Mid-Atlantic had also breached its contract with Kinnel by firing him as salesperson for the St. Anthony's project; and that Mid-Atlantic was guilty of misrepresenting the St. Anthony's and St. Joseph's commission levels to Kinnel.*fn5 Though Kennan was named individually in the complaint as a defendant, the jury as mentioned earlier, was not specifically asked about his liability and thus returned no findings of liability against Kennan.
In addressing Mid-Atlantic and Kennan's claims of insufficient evidence to support the jury's verdict we are necessarily reviewing the district court's denial of their motion for judgment notwithstanding the verdict. In reviewing a judgment n.o.v. we must review the record in the light most favorable to the non-moving party (tin this case Kinnel) and "affirm the judgment of the district court denying the motion unless the record is critically deficient of the minimum quantum of evidence from which a jury might reasonably afford relief." Dawson v. Chrysler Corp., 630 F.2d 950 (3d Cir. 1980)(quoting Denneny v. Siegel, 407 F.2d 433, 439 (3d Cir. 1969)).
We are not free to weigh the evidence or to pass on the credibility of witnesses. Those functions are assigned to the factfinder, in this case the jury. Our function is to determine only whether there is evidence upon which the jury could properly return a verdict, viewing the evidence most favorably to Kinnel the non-movant, and giving Kinnel the benefit of all reasonable inferences. 9 C. Wright and A. Miller, Federal Practice and Procedure, § 2524 (1971).
We need not dwell at length on the evidence as our independent review of the record satisfies us that jury findings in favor of Kinnel and against Mid-Atlantic were supported by sufficient evidence and that accordingly the district court did not err in denying Mid-Atlantic's motion for a judgment notwithstanding the verdict.
Mid-Atlantic first contends that there was not sufficient evidence to support the jury's finding that Mid-Atlantic breached its contract with Kinnel when it failed to pay him finder's fees for the St. Anthony and St. Joseph's projects. Both Mid-Atlantic and Kinnel refer us to the case of Amerofina, Inc. v. U.S. Industries, Inc., 232 Pa. Super. 394, 335 A.2d 448 (1975) as guiding Pennsylvania law on this issue. In Amerofina the Pennsylvania Superior Court stated that a finder:
is an independent actor whose role is that of a middleman who introduces the parties, supplies information to one or both about the other and is required to do little else . . ." The finder is a person whose employment is limited to bringing the parties together so that they may negotiate their own contract . . . ." Tyrone v. Kelley, 9 Cal.3d 1, 106 Cal. Rptr. 761, 507 P.2d 65 (1973). Finders are not involved in "negotiating the price or any of the other terms of the transaction." . . . Thus, the finder's contract is "an arrangement by which an intermediary finds, introduces, and brings together parties to a business opportunity, leaving the ultimate negotiation and consummation of the business transaction to the principals." Annot., Validity Construction and Enforcement of Business Opportunities of "Finder's Fee" Contract, 24 A.L.R. 3d 1160, 1164 (1969]!
Amerofina, 335 A.2d at 451-52. See also Sachs v. Continental Oil Co., 454 F. Supp. 614 (E.D. Pa. 1978)(citing Amerofina). The district court's charge to the jury was drawn from the above quoted language in Amerofina (A1730), and as we discuss below, despite the conflicting evidence, Kinnel's testimony provided ample basis for the jury to conclude that he was entitled to a finder's fee for both the St. Joseph's and St. Anthony's projects.
Kinnel testified that he had an agreement with Mid-Atlantic to provide him with a fee equalling 3% of the construction costs for any project that he "found". (A213, 265-66, 279). With respect to St. Joseph's, Kinnel testified that at the 1983 Catholic Cemetery Convention in St. Louis, he introduced himself to Frank Ward, the Superintendent of the cemetery at St. Joseph's and discussed with Ward the possibility of a building a mausoleum. (A260). Kinnel testified that he was the first person associated with Mid-Atlantic to talk to Ward. Id. Following the convention, Kinnel testified that he called and later visited Ward and Monsignor Donovan, the priest in charge of St. Joseph's. (A260-61). This testimony was corroborated by Kinnel's phone bills and by his turnpike toll receipts. (A261-62). Kinnel also testified that Keenan admitted Kinnel's right to a finder's fee when he (Keenan) suggested that Mid-Atlantic could lower the price of St. Joseph's crypt cost if Kinnel could "drop the finder's fee." (A265). If believed by the jury, this testimony gave credence to Kinnel's claim that it was he, Kinnel, who "found" the St. Joseph's project.
Mid-Atlantic responded that prior to Kinnel's initial conversation with Ward, Mid-Atlantic had sent Ward brochures and had targeted both Ward and Monsignor Donovan, for special attention. (A755, 1673). Kennan testified that he had also met Ward at the 1983 St. Louis convention and that he, ...