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$16 million judgment reversed

The Supreme Court of Virginia took away today a $16 million judgment for a
Richmond grocer who contended that the country’s third-largest grocery supplier forced his companies out of business.

Last June, a Richmond Circuit Court jury awarded Jonathan F. Johnson $15.5 million for constructive fraud and $500,000 for emotional distress. The panel agreed with Johnson’s claim that Minnesota-based Supervalu Inc. had structured a deal with Johnson so there was no way that he could succeed.

Johnson was forced to close his business in 2004 and suffered from severe depression, post-traumatic stress disorder and other health problems as a result afterward.

But the Supreme Court ruled that Johnson had to prove misrepresentation of a present fact by Supervalu to prevail on the constructive fraud count. Instead, he sought to prove only that the supplier failed to fulfill promises of future assistance, Justice Barbara Milano Keenan wrote in Supervalu Inc. v. Johnson.

The emotional distress count failed as well, Keenan said, because “[t]his tort is directed at prohibiting conduct intended to cause personal, emotional damage to an individual, rather than conduct intended to cause economic damage to a business.”

By Alan Cooper

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