Cupps v. Mendelson
Timothy Cupps and Paul Mendelson formed a small corporation, and agreed Mendelson would hold a 60 percent ownership interest and Cupps would hold a 40 percent ownership interest in the corporation. Several years later, Cupps sued Mendelson asserting numerous claims arising from Mendelson's refusal to recognize Cupps's interest in the corporation and pay him his share of the corporate profits. In the first phase of the bifurcated trial, the jury found the parties had "enter[ed] into an oral contract for Cupps to be a 40 percent shareholder" of the corporation. In the second phase, a different jury found Cupps proved his promissory fraud claim against Mendelson, but did not prove his breach of contract or breach of fiduciary duty claims. On the fraud claim, the jury awarded Cupps $155,000 in past economic damages, $233,000 in future economic loss, and $160,000 in punitive damages. The court thereafter granted Mendelson's motion for judgment notwithstanding the verdict (JNOV) with respect to the future damages and punitive damages awards, and agreed to strike those amounts from the verdict.
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