Kirsten Durling, et al. v. Kevin J. King, et al.

Kevin J. King, individually and d/b/a Kevin J. King and RBT Enterprises, (defendant) appeals from the trial court's judgment and amended judgment finding defendant liable for breach of contract and for other injurious behavior towards Kirsten Durling, Tim Hull, and Dee Nichols (Durling, Hull, and Nichols, or, collectively, plaintiffs), and awarding damages to plaintiffs. The plaintiffs cross-appeal from the amended judgment's conclusion that the defendant had not engaged in deceptive and unfair trade practices, and from its denial of plaintiffs' motion for attorneys' fees and treble compensatory damages. We affirm in part and reverse in part. Ty, Inc. is a manufacturer of toys and gift products, most notably small stuffed animals known as ”Beanie Babies.” Defendant began employment with Ty in 1992 as a salaried employee, and became a regional sales representative in 1995. As a sales representative, defendant traveled to card and gift shops in North Carolina to obtain orders for Ty, Inc.'s products. Pursuant to his employment contract, the defendant was allowed to hire “sub-representatives” to assist him in managing his sales contracts. This proved necessary in 1997, when Beanie Babies became immensely popular, and he could no longer manage all of the Beanie Baby contracts alone. Accordingly, defendant hired Nichols, Hull, and Durling. He assigned each of them Beanie Baby sales accounts to service, although he remained responsible to Ty, Inc. for the accounts. The parties agreed that plaintiffs would be paid on a commission basis, to be determined by the value of sales that were paid for and shipped by Ty to its customers. This lawsuit arises out of a dispute over these commissions.

Plaintiffs had no direct employment or contractual relationship with Ty, but only with defendant. Therefore, the documents that confirmed orders placed with and shipped by Ty were sent directly to defendant. These included shipping invoices and monthly sales summaries, from which defendant determined the commissions owed to plaintiffs. During 1997 and 1998, plaintiffs became concerned that defendant was not providing them with all the relevant sales information, or paying them all the commissions theywere owed. The employment relationship among the parties ended in 1998.

On 13 October 1998, plaintiffs filed suit against defendant and against Ty, Inc., alleging breach of contract, unfair and deceptive trade practices, negligent retention and supervision (by Ty, Inc., in its supervision of defendant), conversion, and unjust enrichment (quantum meruit). Plaintiffs sought an accounting of all commissions owed them, as well as costs, attorneys' fees, and treble compensatory damages. Defendant moved for summary judgment, which the trial court granted with respect to the claims for unjust enrichment and conversion. Before trial, plaintiffs dismissed their claims against Ty, Inc., leaving only the present defendant. A jury trial was held in November, 1999. The jury found that defendant had breached his contracts with plaintiffs, and awarded damages for breach of contract in the amounts of $106,000 (Nichols), $24,000 (Durling), and $57,000 (Hull). The jury also answered the following questions affirmatively:

3. Did defendants do any one or more of [the] acts listed in the special interrogatories? Special Interrogatories (1) Did the defendant Kevin J. King, individually or through his trade names, Kevin J. King or RBT Enterprises, [make] efforts to conceal from the Plaintiffs or otherwise prevent them from discovering the true amount of money they were owed pursuant to the commission agreement[?] (2) Did the defendant Kevin J. King, individually or through his trade names, Kevin J. King or RBT Enterprises, wilfully and unfairly [use] his position of power to retain funds due and owing to Plaintiff[s] after being requested to pay these funds to the plaintiff[?]

The jury found that each plaintiff was entitled to $22,000 “as a proximate cause of defendant's conduct,” described in the special interrogatories, adding these damages to those owed for breach of contract, for total damages of $128,000 (Nichols), $46,000 (Durling), and $79,000 (Hull). The trial court entered a judgment reflecting this verdict, from which the defendant appealed on 18 November 1999. Following plaintiffs' motion for treble compensatory damages and attorney's fees, the trial court entered an amended judgment on 20 January 2000. The amended judgment awarded each plaintiff the same amount as in its original judgment, and denied plaintiffs' motions. Defendant gave notice of appeal from this judgment on 7 February 2000; plaintiffs gave notice of appeal from the denial of their motions on 1 February 2000.

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of the Court's opinion.

In conclusion, we affirm the trial court's order finding that the evidence did not establish that defendant had committed unfair or deceptive trade acts or practices, and its consequent denial of plaintiffs' motion for treble damages and attorneys' fees. Consistent with this ruling, we vacate the part of the judgment and the amended judgment awarding plaintiffs $22,000 each for unfair or deceptive trade acts or practices.

Affirmed in part; reversed and vacated in part.

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