Tommy Hutcheson d/b/a Mountaineer Homes; and Mountaineer Homes, Inc., sued Fleetwood Enterprises, Inc. ("Fleetwood"), and Roger Mitchell, alleging fraud, breach of contract and "bad faith," after Hutcheson was terminated as a Fleetwood mobile-home retailer. The trial court entered a summary judgment on the breach-of-contract and bad-faith claims asserted by Hutcheson and Mountaineer Homes, Inc. On the fraud claim, a jury awarded Hutcheson and Mountaineer Homes, Inc., $63,100 in compensatory damages and $189,300 (three times the compensatory damages) in punitive damages. Fleetwood and Mitchell appealed, arguing that they were entitled to a judgment as a matter of law because, they contended, there was a total absence of proof of a false representation and Hutcheson had failed to offer legally adequate evidence of any damage. We reverse and render a judgment for Fleetwood and Mitchell.
Hutcheson started a retail mobile-home business in Spruce Pine, Alabama, in 1989. At that time, Hutcheson entered into retail agreements with Fleetwood, a mobile-home manufacturer. Hutcheson worked with Fleetwood under annual retail agreements, the last of which expired in January 1995. Hutcheson continued to sell Fleetwood homes after the retail agreement expired. The agreements provided Fleetwood retailers, such as Hutcheson, with geographical protection from competing Fleetwood dealers. The retailers were provided with maps that highlighted their protected areas.
Hutcheson's original territory included Franklin, Lawrence, Winston, and Marion Counties. However, in 1994, Fleetwood notified Hutcheson that his customer-satisfaction-index ("CSI") had decreased 40%, and it informed him that because of the decrease it was reducing his protected territory to include only Franklin County. Hutcheson brought his CSI up to 100% by 1996. The last agreement between the parties included a map that indicated Hutcheson's protected area was Franklin County. However, Hutcheson claims that
In the summer of 1996, Hutcheson opened a mobile-home business in Moulton, in Lawrence County. The evidence suggests that Tom Humphries, a Fleetwood representative, told Hutcheson he would need to obtain Fleetwood's approval before taking any Fleetwood mobile homes to the Moulton lot. Roger Mitchell, a sales manager for Fleetwood, testified that he told Hutcheson not to move any Fleetwood mobile homes to the Moulton lot. On August 19, 1996, after Hutcheson had moved five Fleetwood mobile homes to Moulton, Mitchell sent Hutcheson a letter that stated:
On August 23, 1996, Mitchell wrote Hutcheson again:
On September 21, 1996, Hutcheson met with Fleetwood representatives Mitchell and Mike Sullivan to discuss his providing Fleetwood mobile homes in Moulton. A letter from Mitchell to Hutcheson dated September 25, 1996, but postmarked October 2, 1996, states:
Hutcheson had sold three of the Fleetwood mobile homes before the September 1996 meeting. Hutcheson did not move the remaining mobile homes from the Moulton lot until October 3 or 4, 1996. He claims that although he intended to move the two remaining Fleetwood mobile homes before the September 30, 1996, deadline, he wanted and demanded a letter confirming what had transpired at the meeting. On October 18, 1996, Hutcheson received a letter terminating his business relationship with Fleetwood.
Standard of Review
We review a trial court's denial of a motion for a judgment as a matter of law by the same standard we applied to an order denying the motion formerly known as a motion for a directed verdict. Winn Dixie of Montgomery, Inc. v. Colburn, 709 So.2d 1222, 1223 n. 1 (Ala.1998). "The standard of review applicable to a directed verdict or to a denial of a motion for a directed verdict is whether the nonmoving party has presented substantial evidence in support of his position." K.S. v. Carr, 618 So.2d 707, 713 (Ala.1993). "Substantial evidence is evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." West v. Founders Life Assurance Co. of Florida, 547 So.2d 870, 871 (Ala.1989). We have held:
Woodruff v. Johnson, 560 So.2d 1040, 1041 (Ala.1990).
With regard to his fraud claim, Hutcheson and Mountaineer argue that Fleetwood informed Hutcheson in March 1994 that his territory was being reduced because his "customer service index" had fallen. Hutcheson testified that he was led to believe that if he raised his CSI, then his original territory, which had included Moulton, would be restored. "The elements of fraud are: (1) a misrepresentation of a material fact, (2) made willfully to deceive, recklessly, without knowledge, or mistakenly, (3) that was reasonably relied on by the plaintiff under the circumstances, and (4) that caused damage as a proximate consequence." Brushwitz v. Ezell, 757 So.2d 423, 429 (Ala.2000). The parties executed their last retail agreement in March 1994. It was effective from January 1994 through January 1995. Attached
Hutcheson claims that, in reliance on Fleetwood's representation that he would receive his original territory if his CSI increased, he increased his CSI and moved some Fleetwood Homes to Moulton. In order to prevail on his fraud claim, Hutcheson must prove that he reasonably relied on Fleetwood's representations. Hutcheson testified that in May or June 1996, he had a discussion with Tom Humphries about taking some Fleetwood Homes to his new lot in Moulton. Hutcheson testified as follows:
Humphries testified as follows:
Mitchell testified that Hutcheson telephoned him and told him that he was going to start a business in Moulton and wanted to sell Fleetwood homes at his new business. He testified that he told Hutcheson he would call Joel Reagin, a Fleetwood dealer in Decatur, to "see if he minded if Tommy brought products up there that Joel Reagin was not handling." Mitchell testified that when Reagin objected, stating that Moulton was closer to his area, Fleetwood decided not to give the Moulton
The facts suggests that Fleetwood, through its employees Humphries and Mitchell, had indicated to Hutcheson that he should not move any Fleetwood homes to the Moulton lot. These facts do not support Hutcheson's contention that he reasonably relied on Fleetwood's representation (that his original territory would be restored if his CSI increased) when he moved the Fleetwood homes to Moulton. Even if we assume that Fleetwood did lead Hutcheson to believe that he would automatically regain his original territory when his CSI increased, Hutcheson could not have reasonably relied on that representation when he moved the homes to Moulton, because Humphries and Mitchell had indicated to him before he moved the homes to Moulton that the Moulton area was disputed territory. Thus, we conclude that the evidence does not support a finding that Hutcheson reasonably relied on the alleged misrepresentations of Fleetwood's representatives.
We further conclude that Hutcheson has not demonstrated that the alleged misrepresentation proximately caused the damage he alleges. To the contrary, the evidence suggests that Hutcheson knew or should have known, through his conversations with Humphries and Mitchell, that he needed Fleetwood's approval before moving Fleetwood homes to Moulton.
Hutcheson argues that the jury had before it ample evidence from which it could have found that Fleetwood did not disclose its true intentions and motives to Hutcheson when he and Fleetwood representatives met in 1996, after Hutcheson had received the letter asking him to take the Fleetwood homes he had in Moulton back to Spruce Pines or else risk having his business relationship with Fleetwood terminated. In support of this contention, Hutcheson states in his brief that "Roger Mitchell acknowledged that the primary reason for Fleetwood's termination of Hutcheson was the fact that he initially moved houses to Moulton, not that he failed to move them from Moulton." (Emphasis original.) Thus, Hutcheson argues that his moving the Fleetwood home to Moulton was the factor that triggered his termination, and, consequently, that Fleetwood's actions were deceitful because, he argues, the factor that triggered Hutcheson's termination had occurred before Fleetwood sent the letters in August 1996. He claims that Fleetwood induced him to rely on the representations made in the August 1996 letters and at the September 1996 meeting, in order to avoid being terminated, but that Fleetwood had already decided to terminate him for taking the homes to Moulton in the summer of 1996. Mitchell actually testified as follows regarding Hutcheson's termination:
Mitchell further testified on recross-examination that if Hutcheson had moved the homes by September 30, 1996, as he had agreed to do, then he would not have been terminated as a retailer with Fleetwood.
We find in the record no substantial evidence to support a finding that when the parties met in September 1996 Fleetwood already intended to terminate Hutcheson for moving Fleetwood homes to Moulton, regardless of whether he moved the homes back to Spruce Pines before the September 30, 1996, deadline. Nothing in the record suggests that Hutcheson's relationship with Fleetwood would have been terminated even if he had removed the mobile homes from the Moulton lot by the September 30, 1996, deadline.
Hutcheson did not present substantial evidence of fraud. Therefore, Fleetwood and Mitchell were entitled to a judgment as a matter of law on the fraud claim. The judgment in favor of Hutcheson and Mountaineer is reversed, and a judgment is rendered in favor of Fleetwood and Mitchell.
REVERSED AND JUDGMENT RENDERED.
HOOPER, C.J., and MADDOX, HOUSTON, COOK, SEE, LYONS, BROWN, and ENGLAND, JJ., concur.
JOHNSTONE, J., concurs in the result.