EXCEL INDUSTRIAL ELECTRONICS INC V DEBRA BLANCOAnnotate this Case
STATE OF MICHIGAN
COURT OF APPEALS
EXCEL INDUSTRIAL ELECTRONICS, INC,
June 30, 1998
Macomb Circuit Court
LC No. 94-005870 CK
Before: McDonald, P.J., and Neff and Smolenski, JJ.
Plaintiff appeals as of right the trial court’s grant of defendant’s motion for directed verdict on
plaintiff’s claims of breach of fiduciary duties, fraud, tortious interference with advantageous business
transactions, misappropriation of trade secrets and business defamation and the jury’s verdict awarding
defendant $3574.11 in unpaid commissions. We affirm.
First, plaintiff challenges the trial court’s grant of defendant’s directed verdict motion. Plaintiff
erroneously claims that the court raised the motion sua sponte. Defendant moved for directed verdict
on all of plaintiff’s claims, relying in part on earlier motions for summary disposition. By failing to
provide authority that the trial court’s failure to allow defendant to fully present her motion constitutes
reversible error per se, plaintiff has waived this issue on appeal. Mitchell v Dahlberg, 215 Mich App
718, 728; 547 NW2d 74 (1996).
The court ordered directed verdict on all of plaintiff’s claims. While plaintiff asserts that it
presented evidence that defendant made defamatory and slanderous statements against it, plaintiff fails
to directly address the trial court’s ruling on its business defamation claim. “A mere statement of
position is insufficient to bring an issue before this Court.” Meagher v Wayne State Univ, 222 Mich
App 700, 718; 565 NW2d 401 (1997). Plaintiff has not separately or specifically challenged the trial
court’s ruling with regard to its claim of breach of fiduciary duties, which the court also dismissed on
directed verdict. Thus, plaintiff has abandoned this issue. Id.
We are left with plaintiff’s challenge of the court’s ruling regarding its claims of tortious
interference with business relations, misappropriation of trade secrets and fraud. The trial court found
that plaintiff failed to adequately prove its damages, noting that it did not establish its loss of net income
or a measure of damages. We agree that plaintiff failed to provide adequate proof of the damages
caused by defendant.
This Court reviews the trial court’s ruling on a motion for directed verdict de novo. Meagher,
supra at 708. In reviewing a ruling on a motion for directed verdict, this Court considers “the evidence
and all legitimate inferences drawn from the evidence in a light most favorable to the nonmoving party.”
Mason v Royal Dequindre Inc, 455 Mich 391, 397; 566 NW2d 199 (1997). Directed verdict should
be granted only when there exists no factual question upon which reasonable minds can differ.
Meagher, supra at 708.
The party bringing a claim bears the burden of proving damages with reasonable certainty.
Berrios v Miles, Inc, 226 Mich App 470, 478; 574 NW2d 677 (1997). “Although damages based on
speculation or conjecture are not recoverable, damages are not speculative merely because they cannot
be ascertained with mathematical precision.” Id., citations omitted. It is sufficient if there exists a
reasonable basis for computing damages, although the result of the computation is approximate. Id.
Recovery is barred where there exists uncertainty regarding the existence of damages rather than the
amount of damages. Denha v Jacob, 179 Mich App 545, 550; 446 NW2d 303 (1989).
Plaintiff’s argument regarding the trial court’s erroneous ruling rests in part on its assertion that in
a tort action lost profits need not be established as net profits. While the cases instructing that a plaintiff
must prove net profits involved breach of contract, Lawton v Gorman Furniture, 90 Mich App 258,
267; 282 NW2d 797 (1979), citing Benfield v HK Porter Co, 1 Mich App 543, 547; 137 NW2d
273 (1965); The Vogue v Shopping Centers, Inc, 402 Mich 546, 550-552; 266 NW2d 148 (1978),
plaintiff has provided no reasoning to support its position that, for purposes of lost profits, there is a
distinction between damages for a tort and damages in a contract action. Moreover, in that a plaintiff in
a tortious interference action may recover “the pecuniary loss of the benefits of the contract or the
prospective relation,” 4 Restatement Torts, § 774A(1), pp 54-55, it follows that the plaintiff must
establish net profits from gross income. Thus, we find that the trial court did not err by concluding that
plaintiff provided insufficient proof of damages by failing to present evidence of a loss of net profits.
To prove tortious interference with a business relationship, a plaintiff must provide evidence of
a valid business relationship or expectancy, knowledge of the relationship or expectancy
on the part of the defendant, an intentional interference by the defendant inducing or
causing a breach or termination of the relationship or expectancy, and resultant damage
to the plaintiff. [BPS Clinical Laboratories v Blue Cross & Blue Shield of Michigan
(On Remand), 217 Mich App 687, 698-699; 552 NW2d 919 (1996).]
Where an employee obtains a trade secret by virtue of employment, the employee is not permitted to
make use of the secret for her own benefit or disclose the secret to others without the consent of the
original possessor of the trade secret. Dutch Cookie Machine Co v Vande Vrede, 289 Mich 272,
279-280; 286 NW 612 (1939).
Plaintiff presented limited proof of the measure of damages. It presented evidence of a
decrease from 1994 to 1995 in total orders from a specific group of customers. It also presented
evidence in an overall decrease in the amount of repair work it performed in 1995 as compared to 1994
and attributed this decrease from a lack of work from Chrysler, a customer served by defendant.
However, plaintiff left the bulk of the amount of damages attributable to defendant’s alleged tortious
conduct to juror speculation. Plaintiff did not provide evidence regarding the amount of business
generated by the involved customers that was fielded to other sources in lieu of plaintiff due to
defendant’s alleged conduct and failed to provide evidence of the amount of work those customers
would have given plaintiff had it not been for defendant’s conduct. Plaintiff produced no admissible
evidence to substantiate its claim that its business went to a competitor through defendant. There is no
evidence that defendant used any of plaintiff’s trade secrets to her advantage.
The nature of this case is such that plaintiff could have provided a more reasonable estimation of
its damages. Reviewing the evidence in a light most favorable to plaintiff, it is clear that the jury would
have had to speculate as to plaintiff’s damages. The trial court did not erroneously grant defendant’s
motion for directed verdict on plaintiff’s claims of tortious interference and misappropriation of trade
Plaintiff also argues that the trial court erred in granting defendant’s motion for directed verdict
on its fraud claim. The court concluded that the jury would have to speculate as to plaintiff’s damages
because plaintiff did not provide evidence distinguishing valid expenditures from fraudulent expenditures.
We find no error.
First, plaintiff asserts that the trial court improperly labeled the claim as one for breach of
contract, rather than fraud. The record reveals that the court understood the claim as a fraud claim.
The elements for proof of fraud or misrepresentation are: (1) the defendant made a material
representation; (2) the representation was false; (3) the defendant knew the representation was false or
made it recklessly without knowledge of its truth or falsity; (4) the defendant made the representation
with the intent that the plaintiff would act on it; (5) the plaintiff acted in reliance upon the representation;
and (6) the plaintiff suffered damages. Phinney v Perlmutter, 222 Mich App 513, 525; 564 NW2d
Fatal to plaintiff’s fraud claim is its failure to present evidence that defendant fraudulently used
her company credit card. It provided no admissible evidence that the customers defendant claimed to
have entertained in fact did not accompany defendant on the occasions charged to plaintiff. Considering
the evidence in a light most favorable to plaintiff, there are no factual questions for the jury. Plaintiff not
only failed to prove damages in support of its fraud claim, it also failed to establish the remaining
elements of the claim. Therefore, the trial court properly granted defendant’s motion for directed
verdict on this claim.
Next, plaintiff argues that the trial judge’s conduct during the trial, in questioning the witnesses
and responding to counsel, created an impression of impartiality. We disagree.
To review this issue, this Court must review the record in its entirety to determine whether
plaintiff was denied a fair trial through the trial court’s alleged misconduct. Lamson v Martin (After
Remand), 216 Mich App 452, 457; 549 NW2d 878 (1996). The trial court possesses broad power
of control over the manner in which witnesses are examined. MRE 611; Lamson, supra at 458. It
also is endowed with the power to interrogate witnesses. MRE 614.
Plaintiff failed to object to many of the instances of alleged improper conduct by the trial court.
This failure waives appellate review absent unusual circumstances. Meagher, supra at 726. Moreover,
to the extent that plaintiff complains of the trial court’s conduct and questioning of witnesses on evidence
pertaining to its claims rather than defendant’s claim for commissions, whether the trial court acted
improperly is not relevant because it directed the verdict against plaintiff and the jurors did not consider
the issues. Id. Plaintiff has not demonstrated that the directed verdict was a product of judicial bias.
A review of the challenged instances of remarks and questioning by the trial court reveals that
the bulk of them were attempts by the court to clarify the witnesses’ testimony. The court’s questions
and remarks pertained not only to plaintiff’s counsel, but defense counsel as well. Plaintiff has failed to
establish that the court was biased against it or that bias caused the directed verdict.
With regard to the presentation of defendant’s case, which was decided by the jury, we find
nothing improper in the court’s conduct. Rather than improperly interfering in the case and helping
defendant by challenging plaintiff’s witnesses, a reading of the record in its entirety reveals that the court
often had to exercise a more hands-on approach in this trial. Its control appears even-handed.
Moreover, the court instructed the jury to disregard any thought it may have regarding the court’s
opinion as possibly expressed through the court’s rulings, conduct or remarks during trial. It told the
jury that it was the sole judges of the facts. This instruction helped to temper any beliefs the jury may
have had regarding the trial court’s partiality. Overall, the court did not display partiality toward
defendant. Plaintiff has failed to demonstrate a denial of a fair trial through the court’s conduct.
Finally, plaintiff asserts that the trial court should have granted plaintiff’s motion for directed
verdict on defendant’s claim for unpaid commissions because the only evidence defendant submitted in
support of her claim was self-serving and unsubstantiated. It also asserts that the trial court improperly
held it to a higher standard of proof than defendant and was one-sided in its rulings.
In reviewing a decision regarding a motion for directed verdict, this court should recognize the
opportunity of the judge and jury to observe the witnesses and the factfinder’s responsibility to
determine witness credibility and weight of the testimony. Zeeland Farm Servs, Inc v JBL
Enterprises, Inc, 219 Mich App 190, 195; 555 NW2d 733 (1996). Defendant presented admissible
evidence in support of her claim for commissions. Although she drew this evidence from her memory,
the acceptance of her testimony was a matter for the jury and dependent on its assessment of her
credibility. Thus, considering the evidence in a light most favorable to defendant, defendant presented
an issue upon which reasonable minds could differ. Therefore, the trial court properly denied plaintiff’s
motion for directed verdict on defendant’s claim for unpaid commissions.
Plaintiff also argues that the trial court improperly held it to a higher standard of proof regarding
its claims than it held defendant to on her claim. This argument is without merit. Plaintiff simply failed to
provide evidence in support of its claim, but defendant presented sufficient evidence in support of hers.
/s/ Gary R. McDonald
/s/ Janet T. Neff
/s/ Michael R. Smolenski