OPINION
Plaintiff Harrogate Corporation (Harro-gate), brought this suit against two related corporate defendants, defendants/appellants Systems Sales Corporation, (SSC) and Unlimited Sales Systems & Services, Inc. (USS & S). Harrogate’s action sought money and profits stemming from the sale of a computer system.
In 1991, the parties jointly agreed to purchase a Unisys computer and related equipment from a European seller. SSC then resold the computer to a California buyer. By agreement of the parties, SSC was to pay Harrogate fifty percent of the net profits of the sale. Harrogate contested SSC’s distribution of profits and filed a complaint. Following a trial, the Chancellor awarded Har-rogate a judgment of $71,923.24 plus post-judgment interest, as well as ordering SSC to fully account regarding the transaction with the California buyer.
The principle dispute among the parties is the amount of profits available to be divided. Specifically, the parties dispute certain expenses made by both sides and whether such expenses should be deducted from the proceeds of the sale pursuant to the their agreement.
The Chancellor specifically found 1) that Harrogate had legally assigned its contract rights to SSC on the express consideration that Harrogate be paid fifty percent of the profits on all equipment sold covered by the parties agreement; 2) that SSC did sell the computer for $650,000.00, and that the purchase price had been fully paid by the buyer and represented the gross proceeds of the transaction, and 3) that SSC had disbursed $100,000.00 to Harrogate as partial payment of Harrogate’s share of the profit.
The parties are in conflict as to the issues appropriately before this court for review.
Defendants/appellants offer five potential issues for review, all asserting in one form or another that Harrogate has fraudulently concealed monies it received which would impact the net profits owing from the parties’ agreement.
Harrogate responds by emphasizing that they successfully moved for summary judgment on these issues prior to trial, and also prevailed later when the court dismissed defendants/appellants Amended Counter-Complaint. Harrogate contends that because the trial court considered the matter and entered a judgment as to it, which the defendant never appealed, that defendants could not have re-litigated the issue by “merely changing their asserted theory of recovery and bringing the same facts back up.” Harro-gate contends that res judicata barred the defendants/appellants’ attempts to re-argue the issue in its counter-complaint and that the trial court did not err in dismissing that part of the defendants’ amended counter-complaint.
Finally, appellants contest whether the trial court properly directed a verdict on defendants’ counter suit at the close of the defendants’ proof. Presumably, the trial court directed a verdict for Harrogate because the defendant failed to establish a prima facie case of actual fraud against Harrogate. The Chancellor, in granting the directed verdict, told both parties that “this is a case where there is just no proof that [the appellant] is damaged without total speculation.”
Appellants’ issues two, three and five are as follows:
II. The court erred by not permitting the jury to hear evidence of fraud and damages relating to expenses allegedly incurred by the plaintiff who sought and received reimbursement for those expenses from the defendants.
III. The court erred by ruling that the $112,000.00 payment to Harrogate Corporation, and the circumstances surrounding such payment, could not be introduced by the defendants as evidence of fraud and damage at trial, and
V. The court erred by ruling that System Sales Corporation could not present evidence of the amount of money lost by System Sales Corporation due to the fraudulent acts of Harrogate Corporation.
Plaintiff recasts those issues as follows:
I. “Did the trial court err in dismissing in part the defendants’ amended counter-complaint?”
We discuss the foregoing together.
At the October 1994 pre-trial hearing, the Chancellor dismissed SSC’s amended counter-complaint in part on the basis that a portion of that amended counter-complaint had previously been decided and dismissed in January 1994 on the ground of partial summary judgment against SSC.
In its original answer, SSC counterclaimed that Harrogate had “received or claimed commissions and/or refunds from entities providing services related to [the parties’ original purchase agreement with SSC] which affect the element net profits ...” Subsequent to the parties engaging in and having full opportunity to engage in pre-trial discovery, Harrogate moved for partial summary judgment on the original counter-complaint. Following the trial court’s consideration of the entire record, the Chancellor granted summary judgment to plaintiff as to that portion of SSC’s original counter-complaint which alleged that Harrogate received “commissions and/or refunds affecting the ultimate net profits.” SSC did not appeal from that grant of partial summary judgment, nor has it raised the issue on appeal that the grant of partial summary judgment was error.
Notwithstanding the grant of partial summary judgment by the Chancellor, SSC subsequently moved to amend its counter-complaint to assert the same facts under a different theory of recovery. The court entered an order allowing the amended counter-complaint which added the following language: “Harrogate Corporation should be required to pay one-half (½) of the $112,-000.00 paid to Harrogate Corporation by the Institute for Resource Management as an offset to any profits claimed by Harro-gate Corporation under purchase agreement number 0618911.”
In October 1994 Harrogate lodged an amended answer with the court that added “new” counter-claim language. The trial court allowed the lodged answer to be filed on 13 October 1994. Harrogate simultaneously moved the court to dismiss that portion of SSC’s amended counter-complaint in as much as the issue of the $112,000.00 paid to Harrogate by a third party had been properly before the court, briefed, and argued at the earlier hearing on partial summary judgment. Further, the court had previously granted Harrogate summary judgment as to this alleged issue of fraud.
The court, after considering Harrogate’s amended answer to the amended counterclaim, and Harrogate’s pré-trial motion to dismiss the amended counter-claim in part on a res judicata grounds and arguments of counsel at the pre-trial hearing on October 13, dismissed that portion of SSC’s amended counter-complaint seeking one-half of $112,-000.00 as an offset against what SSC owed Harrogate. The Chancellor held that the matter of the $112,000.00 as an offset had been previously considered by the court and ruled on as the grant of partial summary judgment.
The defendants/appellants continue to argue that notwithstanding the court’s dismissal of that part of the counter suit that SSC should still have been allowed to proceed at trial to put on evidence and argument and maintain the counter-claim for an offset equaling one-half of the $112,000.00.
In this state, res judicata operates to bar a claim when a prior judgment in an action between the same parties on the same cause of action concludes not only the facts actually litigated but the facts pertaining to that issue that might have been brought forth and litigated.
Gregory v. Gregory,
While a denial of summary judgment is not an adjudication on the merits and has no res judicata effect, the granting of summary judgment is deemed conclusive of all issues reached and decided by such summary judgment.
Galbreath v. Harris,
Systems Sales briefed and fully argued at the summary judgment hearing any question of the $112,000.00 payment received by Harrogate and on that issue System Sales was unsuccessful. System Sales subsequent attempt to re-raise the same issue in a later amended complaint is properly barred by principles of res judicata. The Chancellor did not err in dismissing pre-trial that part of SSC’s amended counter-complaint concerning the $112,000.00 issue. The defendant/appellant’s second, third and fifth issues are without merit.
We next discuss defendani/appellant’s issues one and four as follows:
I. The trial court erred in dismissing the counter-claim of the defendants for lack of evidence of fraud and damages.
IV. The court erred by ruling that there was no proof that System Sales Corporation was damaged by the actions of Harro-gate Corporation and by ruling that there was no proof that the actions of Harrogate Corporation constituted actionable and compensable fraud.
Plaintiffs restate that issue as: “Did the trial court err in directing a verdict on the defendant’s counter suit at the close of the defendant’s proof?”
We discuss these issues together.
There was no dispute as to the contract purchase price of $315,000.00 for the computer equipment, and no dispute existed that SSC had received payment in full of $650,-000.00 for the computer equipment. The only real issues were what offsets or deductions should properly be chargeable to the parties’ gross profit in order to arrive at the net profit to be divided between the parties and, two, the issue of the accounting due Harrogate from SSC for Harrogate’s share of the profits. There was little or no dispute concerning Harrogate’s case against the defendants. The real dispute was whether there was concern SSC’s claims for offset of Harrogate’s alleged “fraud, concealment, and misrepresentation.”
Because SSC had asked for a jury on the offset issues the Chancellor suggested the parties agree that a proper order of proof was to impanel the jury and let the counter-plaintiff proceed first with its “fraud” case. Accordingly, SSC proceeded to put on its entire case in chief, which consisted of two witnesses, the president of Harrogate and
The standard of review for a directed verdict is well settled. A court must take the strongest legitimate view of the evidence in favor of the opponent, allow all reasonable inferences from that evidence in the opponent’s favor, discard all countervailing evidence and then, affirm the directed verdict when reasonable minds could draw but one conclusion.
Solomon v. First American Nat’l Bank of Nashville,
In the instant case, the Chancellor directed verdict for Harrogate at the close of the counter-plaintiffs suit because the counter-plaintiff failed to introduce evidence during its case in chief to establish a
prima facie
case of actionable fraud against Harrogate. In order to recover for fraud, SSC had to introduce material evidence to establish all of the following elements: one, that Harrogate intentionally misrepresented an existing or past material fact; two, that Harrogate had knowledge that its representation of the existing or past material facts was false; three, that SSC’s reliance on any misrepresentation by Harrogate was reasonable; four, that Harrogate’s misrepresentation induced SSC’s action; and, five, that SSC suffered damage for reliance on the misrepresentation.
See Dobbs v. Guenther,
To constitute fraud the complained of factual misrepresentations must have been false. The complaining party must have relied on the false representation in reaching its decision and the fact misrepresented must have been “so material that it determined the conduct of the party seeking relief.”
Dozier v. Hawthorne Dev. Co.,
A party seeking to recover damages for fraud and/or misrepresentation must not only establish the misrepresentation but must also establish some loss or injury as a result of the misrepresentation. Both misrepresentation and injury must exist before there can be an award of damages.
Whitson v. Gray,
The proper measure of damages for fraud is that the injured party should be compensated for actual injuries sustained by placing him or her in the same position he or she would have been had the fraud not occurred.
Youngblood v. Wall,
Here, the defendants/appellants counter-plaintiffs, by agreement led off with their
SSC had the burden of proving its asserted cause of action.
Leonard v. Gilreath,
The party moving for directed verdict is entitled to such where the other side’s evidence fails to establish a prima facie case for that side’s cause of action. 75a Am. Jur.2d Trial, § 90, (1991).
The issues raised by the defendants/appellants are without merit. It therefore results that the judgment of the trial court is affirmed, and the cause is remanded to the trial court for any further necessary proceedings. Costs on appeal are taxed to the defendants/appellants.