Opposition Brief — Dwight's Discount Vacuum Cleaner City, Inc. v. Scott Fetzer Co.

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No. 88-1755 ” JOSEPH F. SPANIOL, JR,

_ Guprente Court, U.S.

& FILED

| AY 17 198

CLERK

In The

Supreme Court of the United States

October Term, 1988

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DWIGHT’S DISCOUNT

VACUUM CLEANER CITY, INC.,

Petitioner,

THE SCOTT FETZER COMPANY,

KIRBY COMPANY DIVISION,

Respondent.

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On Writ Of Certiorari To The United States

Court Of Appeals For The Fifth Circuit

4.

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BRIEF IN OPPOSITION TO PETITION

FOR WRIT OF CERTIORARI

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Please Serve:

FREDERICK DEB. Bostwick III

NAMAN, Howe8LL, SMITH & LEE, P.C.

P. O. Box 1470

Waco, Texas 76703-1470

(817) 754-1421

COCKLE LAW BRIEF PRINTING CO,, (800) 225-6964

OR CALL COLLECT (402) 342-2831

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TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES .......----sersssessrerees ii

ey ee 8 Seek re ee ea eta 2

STATEMENT OF THE CASE......------:ssseseecer: 2

REASONS FOR DENYING THE WRIT....-------+++> 4

ii

TABLE OF AUTHORITIES

Page

CasES

Bohrer v. Hanes Corporation, 715 F.2d 213 (5th Cir.

‘| i ere Perey re ey igen ee 4

Bunch v. Walter, 673 F2d 127 (Sth Cir. 1982)............ 7

Hinojosa v. City of Terrell, Texas, 834 F.2d 1223 (5th Cir.

BOOED os vend bar cian <eilvadee A595 tha es 4

Hoover v. Ronwin, 466 U.S. 558, 104 S.Ct. 1989, 80 L.Ed

Be FS CUI oan ssn 5 ase ch cme eee eee 7

In re Owners of ‘Harvey Oil Center’ v. Merchants Trust

& Savings Bank, 788 F.2d 275 (5th Cir. 1986)........ 6, 8

National Labor Relations Board v. Pittsburg Steamship

Company, 340 U.S. 498, 71 S.Ct. 453, 95 L.Ed 479

SOOBED codons cabx cs xcccs cilnys boa eee ees 10

Rice v. Sioux City Cemetery, 349 U.S.70, 75 S.Ct. 614, 99

L.Ed OF (IS0® oo. ca viceineke ee emaeeeeeeereeen 9

Rutes AND STATUTES

Fal. BR. Cie FB SOG) 6c devcs i 5 kins son se oe 4,6

supreme Court Rule 286.1 ....0..02 5s caeckissantesaneen 1

Texas Deceptive Trade Practices-Consumer

Protection Act, Tex. Bus. & Comm. Code,

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BEF MOD oc vhs Wein 4505 0e eee an eee 5, 8

No. 88-1755

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In The

Supreme Court of the United States

October Term, 1988

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DWIGHT’S DISCOUNT

VACUUM CLEANER CITY, INC.,

Petitioner,

THE SCOTT FETZER COMPANY,

KIRBY COMPANY DIVISION,

Respondent.

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On Writ Of Certiorari To The United States

Court Of Appeals For The Fifth Circuit

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BRIEF IN OPPOSITION TO PETITION

FOR WRIT OF CERTIORARI

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Respondent The Scott Fetzer Company, Kirby Com-

pany Division,! respectfully submits this Brief in Opposi-

tion to the Petition for Writ of Certiorari filed by

petitioner Dwight’s Discount Vacuum Cleaner City, Inc.,

1 In compliance with Supreme Court Rule 28.1, respondent

shows that The Scott Fetzer Company, Kirby Company Divi-

sion, is a wholly owned subsidiary of BHSF, Inc., which is a

wholly owned subsidiary of Berkshire Hathaway Corp.

seeking review of the judgment and opinion of the United

States Court of Appeals for the Fifth Circuit rendered on

November 28, 1988.

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OPINION BELOW

The judgments of the courts below are attached as

appendices to Petitioner’s petition.

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STATEMENT OF THE CASE

Petitioner Dwight’s Discount Vacuum Cleaner City,

Inc., sued respondent The Scott Fetzer Company, Kirby

Company Division, alleging conversion, interference with

contractual rights, and violations of the Texas Deceptive

Trade Practices-Consumer Protection Act, Tex. Bus. &

Comm. Code §17.41 et seq., which creates causes of action

for certain types of misrepresentation and unconscionable

acts in the consumer setting. Respondent Kirby filed a

counterclaim against Dwight’s for tortious interference

with its distributorship agreement. The opinion of the

Court of Appeals accurately sets forth the factual back-

ground of this case. (App. to Pet. 20)

During the course of the jury trial Kirby moved for a

directed verdict on the petitioner’s claims under the

Texas Deceptive Trade Practices Act generally and specif-

ically argued at that time that petitioner had failed to

establish itself as a consumer under the Act. (App. to Pet.

42) This motion was overruled. Following the close of

petitioner’s evidence Kirby renewed its motion for

directed verdict on the claims under the Texas Deceptive

Trade Practices Act. (App. to Pet. 44) This motion also

was overruled. (App. to Pet. 45)

The jury found-that Kirby had not converted peti-

tioner’s property and had not interfered with a contract

of petitioner’s, but found that Kirby had committed

unconscionable acts. The jury found for Kirby on its

counterclaim against petitioner for tortious interference

but failed to find damages. The trial court entered judg-

ment in favor of petitioner.

Kirby filed a Motion for Judgment Notwithstanding

the Verdict or, Alternatively, for New Trial, on the

grounds that petitioner was not a consumer under the

Act and that the only basis for damages was the jury’s |

finding of unconscionable action under the Act, and there

was insufficient evidence to support the jury’s finding on

unconscionable action. (App. to Pet. 12) These niotions

were denied. (App. to Pet. 17)

Kirby appealed to the Fifth Circuit Court of Appeals

seeking reversal and rendition of judgment or in the

alternative, remand for a new trial. That court, following

its in-depth review of the record, found that “Kirby prop-

erly preserved its objections to the sufficiency of the

evidence by means of a motion for judgment notwith-

standing the verdict.” The court found the evidence

insufficient to support the jury’s finding of unconscion-

able conduct, and reversed and rendered judgment that

petitioner take nothing.

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REASONS FOR DENYING THE WRIT

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Respondent Kirby complied with Rule 50 by making

a motion for directed verdict on Dwight’s claims under

the Texas Deceptive Trade Practices Act. That Act was the

sole basis for Dwight’s claims of unconscionable conduct.

Tex. Bus. & Comm. Code §17.50(a)(3). This motion was first

made following the conclusion of the testimony of

Dwight Krzywonski, president of the petitioner corpora-

tion. It was renewed at the close of the petitioner’s evi-

dence. While it is true that the motion for directed verdict

was not made again at the close of all of the evidence, this

is not an absolute requirement. Hinojosa v. City of Terrell,

Texas, 834 F.2d 1223, 1228 (5th Cir. 1988); Bohrer v. Hanes

Corporation, 715 F.2d 213, 216-17 (5th Cir. 1983). Kirby

sufficiently complied with Rule 50 by making its motion

for directed verdict at the conclusion of Krzywonski’s

testimony and again at the close of the petitioner’s

evidence.

Following the return of the verdict Kirby moved for

judgment notwithstanding the verdict on Dwight’s claims

under the Texas Deceptive Trade Practices-Consumer

Protection Act. On appeal to the Fifth Circuit Court of

Appeals, Kirby complained of the insufficiency of the

evidence to support the jury’s finding of unconscionable

conduct, and requested reversal and rendition or in the

alternative, a new trial.

Kirby thus complied with the procedural prerequi-

sites to obtain reversal and rendition of judgment in its

favor, and Dwight’s Petition for Writ of Certiorari should

be denied.

rs

The holding of the court of appeals in this case is not

“in conflict with” any of the holdings of the opinions of

the Fifth Circuit, other circuits, or this Court cited by

petitioner. The holding of the court of appeals is simply

that the evidence is insufficient to support the jury’s

finding of unconscionable conduct on the part of Kirby.

That holding does not conflict with any of the cases listed

by petitioner.

3.

The Fifth Circuit Court of Appeals did not, as peti-

tioner contends, substitute its factual findings for those of

the jury. The Court analyzed the two-part definition of

“unconscionable conduct” as contained in the Act and

submitted to the jury.

The first part of the definition is conduct which

“takes advantage of the lack of knowledge, ability, expe-

rience, or capacity of a person to a grossly unfair degree.”

The court stated,

Under these facts, it is impossible to conclude that

Kirby took advantage of any “lack of knowledge,

ability, experience, or capacity” of Dwight’s “to a

grossly unfair degree.” Tie evidence in the record,

therefore, does not support a recovery by Dwight’s

under subdivision A of section 17.45(5).

The second type of unconscionable conduct is that

which “results in a gross disparity between the value

received and consideration paid... .” The court held that

the evidence did not support a finding of this sort of

unconscionable conduct.

The court’s holding was a legal determination of the

sufficiency of the evidence. The court did not attempt to

second-guess the jury or substitute its own findings for

those of the jury.

4.

The Court of Appeals did not hold, as petitioner

argues, that compliance with Rule 50 is not a necessary

predicate to rendition of judgment on appeal. This is a

pure and simple misstatement of the court’s holding. The

court did observe that Kirby properly preserved its com-

plaint by means of a motion for judgment notwithstand-

ing the verdict. (App. to Pet. 24) Kirby twice moved for a

directed verdict on petitioner’s claims under the Act,

laying the proper predicate for a motion for judgment

notwithstanding the verdict on petitioner’s claims under

the Act. Not having held that Rule 50 is not a predicate to

rendition on appeal, the Fifth Circuit Court of Appeals is

not in conflict with any other opinion cited by petitioner.

Most of the cases cited and relied on by petitioner

involve the complete failure of the party challenging the

judgment to make a motion for directed verdict and are

therefore not applicable to this case. See for example In re

Owners of “Harvey Oil Center” v. Merchants Trust & Savings

Bank, 788 F.2d 275 (5th Cir. 1986), where the appellant

sought to challenge the sufficiency of the evidence sup-

porting the award of damages. Justice Jones stated:

“Because Merchants failed to move for a directed verdict

at the close of the plaintiffs’ case, see Fed. R. Civ. P. 50(a),

its motion for judgment notwithstanding the verdict on

this point had no proper predicate.” 788 F.2d at 278. See

also Bunch v. Walter, 673 F.2d 127 (5th Cir. 1982), where

Justice Brown observed, “[O]ur review of the record

reveals no motion by Bunch for directed verdict or for

judgment notwithstanding the verdict.” 673 F.2d at 129.

Because Kirby did move for a directed verdict at the

close of petitioner’s evidence on all of petitioner’s claims

under the Act, and filed a motion for judgment notwith-

standing the verdict on petitioner’s claims under the Act,

the cases relied on by petitioner are not controlling.

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Respondent Kirby expressly sought and prayed for

reversal and rendition of judgment in its favor in its Brief

for Appellant in the court of appeals. Petitioner did not

respond in its brief that the court of appeals was not

procedurally authorized to reverse and render judgment,

but instead spent a great deal of time chastising respon-

dent for allegedly failing to include sufficient record ref-

erences in its brief and requesting monetary sanctions

against respondent and its attorneys personally for taking

a frivolous appeal. By failing to complain about respon-

dent’s request for rendition until after it had lost in the

court of appeals, petitioner waived any objection con-

cerning procedural prerequisites for rendition of judg-

ment. Hoover v. Ronwin, 456 U.S. 558, 574, 104 S.Ct. 1989,

80 L.Ed 2d 590, 603 n. 25 (1984). Respondent submits that

sthe-reason petitioner did not complain of respondent's

prayer for reversal and rendition on the issue of uncons-

cionablity is because it knew that respondent had moved

for directed verdict and judgment notwithstanding the

verdict on all of petitioner’s claims under the Deceptive

Trade Practices-Consumer Protection Act, and only did so

in its motion for rehearing in an effort to retrieve its

unjustifiably favorable trial court judgment.

6.

Even under the standard of review applicable when a

party does not move for a directed verdict or judgment

notwithstanding the evidence, the holding and opinion of

the Court of Appeals are correct and do not require

review by this Court.

When no motion for directed verdict is made and no

motion for judgment notwithstanding the verdict is filed,

the Court of Appeals reviews the evidence to determine

whether there was any evidence to support the jury’s

verdict, or whether plain error was committed which, if

not corrected, would result in a gross miscarriage of

justice. In re Owners of “Harvey Oil Center”, supra, 788 F.2d

at 278.

The court held that “there was insufficient evidence

to support the jury’s finding that Kirby’s conduct was

‘unconscionable’ as defined in section 17.45(5)(A) and (B)

of the DTPA.” (App. to Pet. 28) The discussion following

that holding makes it clear the court in reality was saying

that there was no evidence to support the jury’s finding of

unconscionable conduct.

Under the first standard set out in §17.45(5)(A), the

court said, “Under these facts, it is impossible to conclude

that Kirby took advantage of any ‘lack of knowledge,

ability, experience, or capacity’ of Dwight’s ‘to a grossly

unfair degree’.” (App. to Pet. 29) (Emphasis added.)

As to the second standard set out in §17.45(B) involv-

ing a gross disparity between value received and consid-

eration paid, the court said, “subdivision B as well does

not support the jury verdict.” (App. to Pet. 29)

It is clear from the court’s opinion that even were the

court reviewing the record to determine whether any

evidence supported the jury’s finding of unconscionable

conduct, the result would be the same. Based on the

record, Kirby did not engage in unconscionable conduct

against petitioner.

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This is not a case where the court of appeals has so

far departed from the accepted and usual course of judi-

cia! proceedings as to call for the exercise of this Court’s

supervisory power. The issues attempted to be raised by

petitioner in this case are not, contrary to petitioner’s

contention, of such importance to the Bench and Bar as to

require this Court to resolve any conflict in decisions. The

opinion of the court of appeals in this case, finding

respondent’s motion for judgment notwithstanding the

verdict sufficient to preserve error, and then finding

insufficient evidence to support the jury’s finding of

unconscionable conduct on Kirby’s part, sets no prece-

dent and does not “operate to overrule” any previous

decision of any court. Petitioner’s ruminations about

anarchy in the courts are an effort to sway this Court with

an emotional appeal because petitioner is unhappy with

losing a judgment to which it was not entitled by the

evidence. This is not an issue of importance to the public

as distinguished from the parties to this litigation. Rice v.

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Sioux City Cemetery, 349 U.S. 70, 79, 75 S.Ct. 614, 99 L.Ed

897, 904 (1954); National Labor Relations Board v. Pittsburg

Steamship Company, 340 U.S. 498, 502, 71 S.Ct. 453, 95 L.Ed

479, 482 (1951).

The court of appeais minutely reviewed the volumi-

nous record in this case and properly concluded that the

finding of unconscionable conduct was not supported by

the evidence. The court, and properly so, went so far as to

characterize petitioner’s argument for affirmance as “an

affront to the principles of fair dealing.” (App. to Pet. 30)

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CONCLUSION & PRAYER

For all of the foregoing reasons respondent

respectfully requests the Court to deny the Petition for

Writ of Certiorari.

Respectfully submitted,

FREDERICK DEB. Bostwick III

StevE L. Moopy

of

NAMAN, HOwELL, SMITH & LEE, P. C.

Texas Center

P. O. Box 1470

Waco, Texas 76703-1470

(817) 754-1421

Please serve:

FREDERICK DEB. Bostwick III

NAMAN, Howe Lt, SMITH & Lez, P.C.

P. O. Box 1470

Waco, Texas 76703-1470