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Strauss v. Stratojac Corp.

decided: January 26, 1987.


Appeal from the United States District Court for the Northern District of Indiana, Hammond Division. No. 84 C 142 -- Andrew P. Rodovich, Magistrate.

Author: Ripple

Before CUMMINGS and RIPPLE, Circuit Judges, and ESCHBACH, Senior Circuit Judge.

RIPPLE, Circuit Judge. Appellant strategic Corporation (Stratojac) appeals from a judgment entered against it on a jury verdict for $75,000 in compensatory damages and $75,000 in punitive damages. Because Stratojac's challenges to this judgment either have no merit or have been waived, we affirm the judgment of the district court.


Appellee Isidore Strauss, a resident of New York, sought and obtained a position as special assistant to the president of Winer Manufacturing, a clothing manufacturer located in Hammond, Indiana. The president and owner of Winer Manufacturing, Louis Winer, was in his late seventies. Mr. Winer was seeking an assistant to help him in the day-to-day operation of the business. However, he was also attempting to identify a suitable purchaser for his company.

The employment agreement executed by Mr. Strauss and Mr. Winer provided for a six-month trial period. During this time, Winer Manufacturing agreed to pay Mr. Strauss' expenses for commuting between New York and Indiana. Under the terms of the contract, either party could terminate the agreement at the end of the six-month period. If the arrangement proved mutually beneficial, the agreement provided that, at the end of that six-month period, the parties expected Strauss to relocate his family in the Hammond area, and that the term of employment would continue through October 31, 1985. The agreement also provided that Strauss' employment agreement was assignable to the purchaser to Winer Manufacturing, if the company were in fact sold.

The six-month period ended on October 31, 1983. At that time, Mr. Winer was negotiating the sale of Winer Manufacturing to Stratojac. Because the parties had not resolved whether Stratojac would take on Mr. Strauss' contract, Mr. Winer told Mr. Strauss that he would not be expected to relocate his family while his status was uncertain. Mr. Winer also indicated that the company would continue to pay Mr. Strauss' commuting expenses until his long-term employment status was resolved.

On January 31, 1984, Stratojac purchased Winer Manufacturing. As part of the sales agreement, Stratojac agreed to assume Strauss' employment agreement. Mr. Strauss was given the position of Vice President of Manufacturing which he claims was a demotion. The assignment agreement was specifically subject to the terms of the sales agreement between Stratojac and Winer Manufacturing. Apparently, Mr. Strauss sought to have a definite statement of his position with Stratojac. Stratojac, in turn, demanded that Mr. Strauss either move or commit to move to the Hammond area within a few weeks. In a letter dated February 16, 1984, Stratojac's President, Steve Sakin, informed Mr. Strauss that Stratojac would no longer reimburse him for his commuting expenses, and that, if Stratojac did not receive, within three business days, a written commitment from Strauss to move to the Hammond area, it would take "appropriate" action. On February 22, 1984, Mr. Sakin told Mr. Strauss that he was "fired" because he would not commit himself to relocating his family to the Hammond area.

On March 2, 1984, Mr. Strauss commenced this action for breach of contract, interference with contractual relations, conspiracy to breach a contract, and conspiracy to interfere with contractual relations. The case was tried before a jury,*fn1 and, on January 11, 1985, the jury returned a verdict for Mr. Strauss and against Stratojac in the amount of $75,000 in compensatory damages and $75,000 in punitive damages. The jury also answered five interrogatories that were submitted to it at the request of the defendants. A subsequent motion for judgment notwithstanding the verdict (judgment n.o.v.) was denied. This appeal followed.

In this court, Stratojac raises four challenges to the judgment of the district court.*fn2 It submits: 1) that the district court should not have entered judgment on the jury's verdict because the answers to the special interrogatories and inconsistent with one another and at least one of these answers is also inconsistent with the general verdict; 2) that Mr. Strauss has not established the necessary elements to prevail on a breach of contract claim; 3) that the evidence does not support an award of punitive damages; and 4) that the compensatory damage award is excessive. We shall address each of these contentions in the following sections.


Inconsistent Verdicts


Stratojac first contends that the jury's answers to the special interrogatories are inconsistent with one another and that at least one of them is inconsistent with the general verdict. Stratojac argues that the entry of judgment was therefore improper under Fed. R. Civ. P. 49, Mr. Strauss counters that the jury's replies are not inherently inconsistent. In any event, he continues, Stratojac has waived this argument by failing to raise it before the trial court.

At the request of the defendant, the court submitted the following interrogatories to the jury (jury responses are indicated by italics):

if the jury has returned a verdict for the plaintiff, it is hereby instructed to answer the following Interrogatories:

1. If you found against some or all of the defendants and in favor of the plaintiff, is your verdict based on the following:

a. wrongful interference with a ...

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