Date: 05-03-2002

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

Case Number: 2001-203

Judge: Amestory

Court: Supreme Court of Vermont

Plaintiff's Attorney: John J. Welch, Jr., Rutland, for Plaintiffs-Appellees.

Defendant's Attorney: Kevin Ellicott of Ellicott, P.C., Rutland, for Defendants-Appellants.

Description: 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.

Outcome: 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.

Plaintiff's Experts: Unavailable

Defendant's Experts: Unavailable

Comments: None