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Federal judge rejects Giant's request for new trial

Published February 23, 2016
Judge also rejects request to lower $3 million award to Florida retailer.

TAMPA, Fla (BRAIN) — A federal court judge, in a stinging review of an ongoing case involving Giant Bicycles and Florida retailer Frances Kane, has denied appeals by Giant's attorneys to overturn a jury's verdict.

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On Monday, U.S. District Court Judge Steven D. Merryday said no to Giant's request for a new trial and a request that he reduce a $3 million punitive award to Kane.

In a separate decision, Merryday also denied Giant's request to keep documents and testimony about Giant's finances confidential.

The judge's rulings, part of an ongoing appeals process, is the latest round in a more than two-year-long battle in which a Florida jury awarded Kane $250,000 in compensatory damages and $3 million in punitive damages.

Last September, a nine-person jury, in a unanimous verdict, concluded that Giant had fraudulently induced Kane, owner of Flying Fish Bikes, to order $120,000 worth of bicycles to be sold in the spring of 2013. At the same time Giant executives were planning to terminate their relationship with Kane and open a Giant store less than two miles from Kane's operation.

Giant's lawyers said at the time that they would appeal. Giant executive director John Thompson told retailers that BRAIN's coverage of the verdict failed to tell both sides of the story. "We want to assure you that the picture presented by the media coverage of this case is not the way Giant Bicycle does business. We sincerely hope you agree,” Thompson said in the letter. Giant executives have declined to comment on the case because of the ongoing litigation.

Merryday, in a 43-page order, pointed out that Kane had been a Giant dealer since 2006 and that Giant could have terminated its dealer agreement with Kane with a 90-day written notice.

Instead of terminating Kane, Giant's then general manager, Elysa Walk, along with Thompson, regional sales manager Geoffrey Godsey and Florida account executive Mickey Singer induced Kane to order inventory for the upcoming 2013 season. Last October, Walk left Giant for a job at Burton Snowboards and Thompson was promoted to general manager.

Merryday, citing emails between Giant executives, pointed out that Gregg Frederick, at the time Giant's director of retail services, had advised Godsey and Singer that it wasn't right to sell Kane bicycles knowing that Giant was about to terminate him and open a store less than two miles from Flying Fish.

In an email, Singer responded: "I have three kids to feed. I need the order." Godsey responded: "I'm here to sell bikes and we need to hit numbers in (the fourth quarter), so we need to do what we can to sell bikes."

Godsey then sent an email to Thompson noting that Kane had accepted Giant's terms. "This should keep us in position with product in the market until the distribution change associated with Outspokin (Bicycles) materializes," Godsey wrote.

"Since 2006, Giant had not suggested exercising this right to terminate. Rather, during the negotiations, Giant re-emphasized renewed and lasting relations with Flying Fish," wrote Merryday, a 24-year veteran of Florida's Middle District U.S. District Court.

The judge noted other emails from Godsey to Thompson that outlined the transition plan from Kane to Outspokin. "As for Flying Fish, (I) began laying groundwork to make (the) transition out of that relationship. At this point (Kane) has ZERO idea about what is about to take place. I played things very cool, remained calm and (Kane) is all BARK and no BITE as I suspected," Godsey wrote.

Two weeks after Godsey wrote that email in November 2012, Giant and Outspokin owner Steve Tavanese, a Clearwater, Florida, Giant dealer, began work on the interior of the new store. On Dec. 20, 2012, Godsey told Kane Giant was terminating him as a dealer.

Merryday, as part of his order, wrote, "Giant devised a scheme in pursuit of a single goal — maintaining Giant's 'momentum' in the market by defrauding Flying Fish." Giant coordinated with Outspokin to acquire a retail site and stock it with Giant products, while promising Kane a lasting relationship.

"Giant fastidiously kept information about the new store from Flying Fish. Each course of action required months of careful attention and implementation," Merryday wrote denying Giant a new trial or a reduction of damages.

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