Eulrich v. Snap-On Tools Corp.

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Promotional programs automatically delivered a set amount of the promotional tool of the month to dealers, billing them for the cost, requiring payment and freight to return.

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Plaintiff's financial ruin by spring 1987.

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A jury poll established that different groups of nine jurors concurred in the separate punitive damage awards, though all jurors agreed on liability for both claims.

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Plaintiff alleged he could not have known this due to lack of comparative data held by defendants.

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Plaintiff's severe financial difficulty, inability to pay household bills, and wife's medical needs.

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Defendants fraudulently induced plaintiff to enter the dealership agreement by misrepresenting the earning potential and adequacy of the sales territory.

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Beginning in April 1987, plaintiff made numerous attempts to get Kash and Park to 'check in' his truck to receive a refund for tools and equity in his van.

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Plaintiff's lack of knowledge of legal claims against defendants at the time of signing.

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Plaintiff's supervisors, defendants Kash and Park, continually berated plaintiff, denigrating his business ability and insisting his failure was his own fault.

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Plaintiff's initial investment and promised balance.

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Internal Snap-On documents ('Success Express' and 'Field Manager New Dealer Checklist'), not distributed to dealers, indicated a successful dealership needed at least 250 active customers.

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Defendants promised to 'take care of' their dealers and exercised complete control over how the business was run and over the size and location of the dealer's territory.

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Different groups of nine jurors concurred on each punitive damage award.

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By spring 1987, plaintiff was financially ruined.

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The dealership agreement allowed Snap-On to repurchase tools upon termination 'with the consent of the Company'.

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Defendants badgered plaintiff into making marginal sales and over-extending credit to his customers, for which plaintiff was personally liable.

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Jorgeson (former Snap-On manager) testified about mandatory growth policy leading to shrinking territories with fewer than 200 customers, making survival difficult during slumps.

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Defendants' fraudulent inducement regarding earning potential and territory adequacy.

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Supervisors Kash and Park berating and demoralizing plaintiff.

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The jury granted awards to plaintiff for both fraud and breach of contract.

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Plaintiff relied on several documents provided by defendants, including income comparisons of Snap-On dealers, tax returns and financial analyses for 18 Portland area Snap-On dealers.

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Jury granted awards for both fraud and breach of contract.

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Plaintiff's supervisor did all of his paperwork for the first month, and continued to do some of that paperwork throughout plaintiff's tenure as a dealer.

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A former Snap-On dealer testified his territory shrunk to fewer than 225 customers, making success impossible.

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Plaintiff alleged that a minimum of 250 to 300 'professional' mechanics were necessary for a successful dealership, information he could not have known but was held by defendants.

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Plaintiff's local supervisors told him which options to get in his Snap-On van, which tools to stock, which advertising items to order, and what office equipment and supplies to purchase.

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Plaintiff expected to recoup expenditures and foregone income through dealership profits.

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All jurors agreed on defendants' liability for both underlying claims.

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The 'Termination Agreement' included a release of claims.

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Plaintiff testified he was told his territory would have 200-300 customers but not that it *required* that many for success.

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These internal documents were not distributed to dealers.

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Plaintiff sought rescission of the release, claiming mistake, undue influence, lack of consideration, adhesion, and economic duress.

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Defendants had not sent the termination documents to plaintiff in advance for review.

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Damages for breach of contract aim to put injured party in as good a position as performance would have.

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'Field Manager New Dealer Checklist' (internal Snap-On document) contained same 'Basics for Success' checklist.

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Defendants' badgering plaintiff into marginal sales and over-extending credit.

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Defendants' promise to buy back tools at original price.

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The jury awarded plaintiff general and punitive damages totaling $8,912,000.

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The release waived 'any and all claims it may have against the other arising out of the Dealership terminated by this Agreement'.

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Defendants' presentation of numerous documents for signing without prior review.

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Kash told plaintiff he had to sign the papers before he could get any money, and Park stated no checks would be issued until papers were signed.

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Mikesh (former Snap-On dealer) testified his territory shrunk to fewer than 225 customers, making success impossible.

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Plaintiff's physical and emotional state during termination process.

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On June 1, plaintiff spent five or six hours unloading and inventorying his van with Kash, who was 'not kind at all'.

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The jury awarded punitive damages on both the fraud claim and the tortious breach of the duty of good faith claim.

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Plaintiff's numerous attempts to terminate and get tools checked in from April 1987.

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Defendants knew plaintiff's wife was extremely ill with toxemia related to her first pregnancy, required hospitalization, and they had no medical insurance.

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Kash's statement that plaintiff had to sign papers to get money.

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Plaintiff's dealership was not profitable from the start.

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The Dealership Agreement gave Snap-On complete control over plaintiff's territory and reserved the power to adjust it at any time.

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Ongoing, intensive supervision in which the field manager rode along with plaintiff and actually conducted sales on behalf of plaintiff.

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Plaintiff relied on a statement of profit potential for new Snap-On dealers, which stated that 'your earnings as a Snap-On dealer are above the national income average, enabling you to acquire the good things in life. Successful dealers are among the top 10% of national income brackets, along with doctors, lawyers, and other professionals. * * * [M]ost dealers recover their initial investment in inventory in less than a year.'

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Kash and Park repeatedly put off the check-in until June 1, by which time plaintiff was in serious financial difficulty and could not pay household bills.

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Defendants' delay of check-in until June 1.

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Plaintiff received credit for inventory at current dealer cost ($38,377).

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Plaintiff initially invested approximately $22,000 in inventory and accounts, and promised to pay a balance of $22,500 from sales.

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Jury awarded punitive damages.

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A former Snap-On field manager testified about mandatory growth policies leading to shrinking territories with fewer than 200 customers, making dealer survival difficult.

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Dealership's unprofitability from the start.

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Defendants' continued berating of plaintiff during signing.

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Plaintiff signed a 'Termination Agreement' which included a release of claims, without reading all papers due to the hostile environment and his desire to leave.

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'Success Express: Catch It!' document (internal Snap-On guide) indicated '200 or more R.A. customers' and 'at least 50 E.C. Customers' for 'Dealers Basics for Success' (totaling 250+).

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Plaintiff was physically tired and emotionally drained when he was told to sign numerous documents to terminate the dealership.

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In Park's office, Kash and Park continued to berate plaintiff, calling him a failure and criticizing his business practices.

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Snap-On provided plaintiff with extensive funding and financing and encouraged plaintiff to use Snap-On's credit extending program, for which plaintiff was liable.

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Plaintiff alleged 250-300 'professional' mechanics needed for successful independent business.

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Plaintiff Dan Eulrich was an auto body mechanic with no prior business experience before becoming a Snap-On dealer.

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Jury awarded punitive damages for fraud and tortious breach of good faith.

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Plaintiff's evidence of fraud damages showed investment, income foregone, and sacrifices in reliance on defendants' representations.

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In early 1987, plaintiff unsuccessfully attempted to get a more profitable territory.

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Dealership agreement did not require defendants to buy back tools, but allowed it with consent.

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Plaintiff did not know at the time of signing that he had legal claims against defendants.