Robert W. Maguire and Robert W. Maguire, Ltd. v. Samuel J. Gorruso and Sammy G. Media Corp.

Defendants Samuel J. Gorruso and Sammy G. Media
Corporation appeal from a judgment, based on a jury verdict, in favor of
plaintiffs Robert W. Maguire and Robert Maguire, Ltd., awarding damages of
$272,000 for unfair competition and $143,000 for conversion. Defendants
contend: (1) compensatory damages were unavailable as a matter of law for
the common law unfair competition claim of trade name or trade dress
infringement; (2) the evidence was insufficient to prove the elements of
the infringement claim; (3) the court abused its discretion in denying a
motion to modify the conversion award; and (4) the court erred in allowing
defendant Gorruso to be held personally liable. We remit the award for conversion,
and otherwise affirm the judgment.

Viewed in the light most favorable to the judgment, Hanes v. Golub
Corp., 166 Vt. 228, 233, 692 A.2d 377, 380 (1997), the underlying facts
may be summarized as follows. For many years, plaintiffs Robert W.
Maguire and Robert Maguire, Ltd. (hereafter plaintiffs or Maguire) owned
and operated a weekly advertisement-based paper known as The Rutland
Shopper and, later, as The Rutland Tribune. In March 1998, plaintiffs
entered into a combined lease and purchase-and-sale agreement with
defendants Samuel J. Gorruso and Sammy G. Media Corp. (hereafter defendants
or Gorruso). The agreement provided for defendants to assume full
operational control of the business, including its equipment, inventory,
trade names and receivables, and to pay plaintiffs a monthly consulting
fee until November 1999, when defendants would purchase the business for
the sum of $628,000.

Defendants operated the business under the name The Rutland Shopper
until the end of June 1999, at which time plaintiffs resumed possession
and operation of the business pursuant to a subsequent agreement between
the parties. Under that agreement, dated June 24, 1999, all prior
contractual obligations between the parties were canceled, plaintiffs
agreed to pay defendants a total of $25,000, and defendants agreed to have
no further involvement with the business and to refrain from any use of
the names The Rutland Shopper or The Rutland Tribune. Although the original
purchase/lease agreement contained a specific non-compete clause, the June
1999 memorandum canceling the agreement lacked such a clause.

Almost immediately after the parties' June agreement, defendants moved
to a separate location in Rutland and commenced publication of an
advertisement-based paper under the title
Sam's Good News Shopper. Plaintiffs, in response, filed this action
against defendants, alleging - among other claims - conversion of various
items of property, including a customer list, computer and photographic
equipment, and other hardware; unfair competition through misappropriation
of business assets as well as trademark and trade dress infringement; and
fraud. In addition to damages, plaintiffs sought an injunction
prohibiting defendants from using the name "Shopper" in their title.
Following a hearing in late July 1999, the Rutland Superior Court issued a
preliminary injunction prohibiting defendants from publishing within
Rutland County, during the course of the litigation, any newspaper or
advertising weekly using the word "Shopper" in the masthead, or from using
the same format as the The Rutland Shopper.

At the end of a five-day trial in January and February 2001, the jury
returned a verdict in favor of plaintiffs, awarding damages of $143,000
for conversion of property, $272,000 for unfair competition, and $1.00 for
punitive damages. The jury found in favor of plaintiffs on defendants'
counterclaim for defamation. In response to defendants' subsequent motion
to alter or amend, the court struck the $1.00 award of punitive damages,
but otherwise denied the motion. The court subsequently entered an
amended judgment in favor of plaintiffs, awarding damages totaling
$415,535.18 (the conversion and unfair competition awards plus costs).
This appeal followed.

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Click the case caption above for the full text of the Court's opinion.

The amended judgment is modified by striking the damage award of
$415,535.18 and substituting in its place an award of $273,535.18. In all
other respects, the judgment is affirmed.

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