Ex-grocer defends award
Va. Supreme Court hears Supervalu’s appeal of jury decision for Johnson

By Frank Green, Richmond Times-Dispatch – June 5, 2008

Lawyers for former Richmond supermarket owner Jonathan F. “Johnny” Johnson appeared before the Supreme Court of Virginia yesterday to defend a $19 million lawsuit award.

“I represent a Richmond grocer who was driven out of business,” L. Steven Emmert, one of Johnson’s lawyers, told the justices yesterday. Johnson went from a bag boy to the head of his own Community Pride supermarket chain. But the business failed in 2004.

Johnson contends he was forced out of business by Supervalu Inc., a large, Minnesota-based grocery wholesaler he agreed to purchase merchandise from in 1999.

Last year a Richmond Circuit Court jury awarded Johnson $16 million, finding that Supervalu had engaged in “constructive” fraud and intentionally inflicted emotional distress. A judge later added $3 million for interest.

Supervalu appealed to the Supreme Court of Virginia, which heard arguments yesterday.

Edward J. Fuhr, one of Supervalu’s lawyers, told the justices that Johnson had presented no evidence of constructive fraud.

Constructive fraud is an innocent or negligent misrepresentation of past or present fact — not something based on unkept promises, which would be “actual” fraud. In any case, Fuhr said, the most damages that Johnson could prove totaled just $327,000.

Fuhr also said it was unheard of for emotional distress to be found in what was essentially a corporate battle.

But Emmert said, “This corporation intentionally and systematically invoked personal ruin upon this man. . . . They wrecked his life.” The misconduct was directed toward a man, Johnson, and not his company, Emmert told the justices.

“He is the one who lost his livelihood and a good deal of his emotional stability.”

Emmert said the justices must decide whether the jury could find there was constructive fraud, or whether the judge should have ruled that no jury could possibly find constructive fraud based on the facts and then set aside the verdict.

Carl Tobias, a professor at the University of Richmond School of Law, said, “I think, as a general matter, it’s difficult to overturn a jury’s factual determination.” Tobias added, “There’s really substantial incentive on both sides to settle this.”

Johnson was not present yesterday but Emmert said after the hearing that he was doing well. A ruling is expected to be handed down in September.

Contact Frank Green at (804) 649-6340 or fgreen@timesdispatch.com .