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Buckner, Randall R. and Dimensional Circuitronics Inc. v. Roca Precision Manufacturing Inc. and Finberg, Barry L. ( 2002 )


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  • Affirmed and Opinion filed October 24, 2002

    Affirmed and Opinion filed October 24, 2002.

     

     

     

    In The

     

    Fourteenth Court of Appeals

    _______________

     

    NO. 14-00-01458-CV

    _______________

     

    RANDALL R. BUCKNER and DIMENSIONAL CIRCUITRONICS, INC., Appellants/Cross-Appellees

     

    V.

     

    ROCA PRECISION MANUFACTURING, INC. and BARRY L. FINBERG, Appellees/Cross-Appellants

    _______________________________________________________________________

     

    On Appeal from the 11th District Court

    Harris County, Texas

    Trial Court Cause No. 97-32461

    _______________________________________________________________________

     

    O P I N I O N

     

    In this employment dispute, appellants Randall R. Buckner and Dimensional Circuitronics, Inc. (ADCI@), and appellees Roca Precision Manufacturing, Inc. (ARoca@) and Barry L. Finberg, cross-appeal a judgment in favor of Buckner and DCI on various grounds.  We affirm.

     

                                                                       Background

    Finberg was the president and chief executive officer of Roca, a fabricator of printed circuit boards. Buckner was an owner and the president of DCI, another manufacturer of circuit boards.  Roca, Buckner, and DCI entered into three written agreements (the Aagreements@) whereby Roca agreed to: (1) purchase equipment from DCI for $10,000 (the Abill of sale@); (2) employ Buckner as manufacturing manager of Roca, including a base salary and commissions on new work obtained by Buckner (the Aemployment agreement@); and (3) pay Buckner a 10% commission on all collections received by Roca from former DCI customers for 60 months (the Acommission agreement@). Six months after the agreements were entered, Finberg, on behalf of Roca, terminated them.

    Buckner and DCI sued Finberg and Roca for breach of contract, tortious interference, and other claims and sued Finberg individually for tortious interference with contract.  At trial, the jury found, among other things, that: (1) Roca breached the Acontract,@ defined in the charge as being comprised of the three agreements; (2) Roca=s breach was excused by good cause for discharging Buckner; (3) Buckner did not breach the contract; (4) Finberg intentionally interfered with the contract without justification; (5) $112,000 was the amount of Buckner=s economic loss and $0 was the amount of DCI=s economic loss; and (6) the harm caused to Buckner resulted from malice or fraud by Finberg but not Roca.  The parties stipulated that the amount Finberg should pay to deter such conduct in the future was $112,000.  The trial court entered judgment in accordance with the verdict except in making no award for exemplary damages.

                                                              Finberg / Roca Appeal

    Although Buckner and DCI were the first parties in this case to file a notice of appeal, the only affirmative relief awarded in the trial court=s judgment is against Finberg, and most of the parties= briefing pertains to that award.  Accordingly, we will address Finberg=s and Roca=s issues first.

     

                                                                     Agent Liability

    Finberg=s first issue contends that there is no evidence or insufficient evidence of the elements necessary to prove tortious interference with a contract by an officer or agent of a corporation that is a party to that contract.  According to Finberg, these elements include that: (1) the interference was motivated solely by the agent=s personal interest; (2) the interference harmed the corporation; and (2) the corporation complained about the agent=s alleged interference.[1]

    In a case tried to a jury, a no evidence challenge is preserved by: a motion for instructed verdict; a motion for judgment notwithstanding the verdict; an objection to the submission of the issue to the jury; a motion to disregard the jury=s answer to a vital fact question; or a motion for new trial.  T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 220 (Tex. 1992).  A challenge to the factual sufficiency of the evidence to support a jury finding must be preserved with a motion for new trial.  Tex. R. Civ. P. 324(b)(2).  In addition, to preserve a complaint for appellate review, a request, objection, or motion made to the trial court must state the grounds for the ruling sought with sufficient specificity to make the trial court aware of the complaint.  Tex. R. App. P. 33.1(a)(1)(A).  Judicial economy thus requires that a trial court have an opportunity to correct an error before an appeal proceeds.  In re C.O.S., 988 S.W.2d 760, 765 (Tex. 1999).

    In this case, the record does not reflect that Finberg made a motion for directed verdict, motion for judgment notwithstanding the verdict, or objection to submission of the interference issue to the jury.  Citing Baker,[2] Finberg=s motions to disregard the jury findings and for new trial argued that he did not tortiously interfere with Roca=s contracts because the evidence conclusively proved that Finberg was so closely aligned with Roca that they were one entity.[3]  Thus, rather than contend that the evidence was insufficient to prove additional facts necessary to establish interference by an officer, as Finberg now asserts on appeal, his motions in the trial court took the position that the evidence was conclusive in establishing that, as the sole shareholder, owner, and President of the corporation, he was its agent and therefore not a third party who had the separate legal capacity to interfere with its contracts.[4] Because Finberg thus did not give the trial court an opportunity to rule on the sufficiency of the evidence to show the additional facts that the interference was motivated solely by his personal interest, the interference harmed the corporation, or the corporation complained about his alleged interference, the sufficiency of the evidence to prove those facts is not properly before us for review.  Accordingly, Finberg=s first issue is overruled.

                                                                    Excused Breach

    Finberg=s second and third issues contend that he could not be liable for tortious interference because: (1) the jury found that Roca was excused from complying with the contract; and (2) Roca had a common law and contractual right to terminate the contract.

    The prefatory instructions to the jury charge stated, among other things, that the Acontract@ in this lawsuit was one overall contract composed of the three separate agreements.[5]  The first two questions in the charge pertained to Buckner and DCI=s breach of contract claim. Following question 1, to which the jury responded that Roca had breached the contract, question 2 asked whether Roca=s failure to comply with the contract was excused.  Accompanying question 2 was an instruction (the Aexcuse instruction@) that Roca=s failure to comply, if any, was excused if there was good cause for discharging Buckner before the agreed term of employment expired.  The jury answered question 2 affirmatively, negating Roca=s liability for breach of contract.

    By contrast, question 13 of the charge asked whether Finberg, without justification, intentionally interfered with the contract.  The definitions preceding this question stated that a person interferes with a contract between others by causing or inducing a breach of contract or interfering with its performance; and that interference is justified if a person had a good faith belief that he had a right to do so.  The jury also answered question 13 affirmatively.

    In the context of this submission, Finberg=s second and third issues assert that: (1) Roca had a common law and contractual right to terminate Buckner=s employment, and thus the entire contract, as defined in the charge; and (2) Finberg did not therefore interfere with the contract by causing Roca to exercise its right to terminate the contract, as reflected by the jury=s finding that Roca=s breach of the contract was excused.[6]  We disagree with this analysis in two respects.

    First, the charge definition of interference included causing a breach of the contract but was not limited to causing an unexcused breach.[7]  Therefore, to the extent the jury determined that Finberg caused Roca to commit the breach of contract that it had found in answer to question 1, a further finding that Finberg interfered with the contract by causing that breach was consistent with its answer to question 1 and not affected by its answer to question 2 that the breach was excused.

    Second, the charge defined interference to include not only causing a breach of the contract, but also interfering with its performance.  To the extent the jury was persuaded that Finberg interfered with Roca, Buckner, or DCI performing the contract, i.e., apart from Roca=s breach,[8] the fact that its breach was excused did not preclude Finberg=s liability for interference. Therefore, Finberg=s second and third issues are overruled.

                                                                          Damages

    Finberg=s fourth issue argues that, because the measure of damages for tortious interference with a contract is the same as the measure of damages for breach of the contract interfered with, it was necessary for Buckner to prove the amounts he would have received under the contract, but he failed to do so.  Finberg further contends that the evidence is legally or factually insufficient to support the jury=s answer that Buckner suffered economic damages of $112,000 from the interference.[9]

    The commission agreement states, in part:

    2.01 Commission Paid.   Roca shall pay to Buckner, in addition to all of the other payments provided by the Agreements . . ., a commission of Ten percent (10%) on all cash collections received by Roca from the former customers of [DCI], for a period of sixty (60) months.

    2.02 Time and Amounts of Payment.  Except for August, September and October, 1996, Roca=s monthly payments will be equal to Ten percent (10%) of all cash collections of Roca from former DCI customers for the previous month.  The minimum monthly payment shall be $2,000, and the monthly payment will be adjusted each month based on fluctuations in such sales.

    2.03 Payments for August, September and October, 1996.  The monthly payments for August, September and October, 1996 shall be $5,000 per month.

    (emphasis added).  In addition, the prefatory instructions in the jury charge instructed the jury that it was to interpret the meaning of the contract and, in doing so, it could consider the facts and circumstances surrounding the making of the contract and the conduct of the parties.[10]  The foregoing paragraphs of the commission agreement can be read to obligate Roca to pay Buckner a total of $129,000 over a 60-month period.[11]  Up to the date of his termination, Buckner testified that he had received $17,000 in commission payments, leaving a balance of the $112,000 awarded by the jury. Therefore, the damage award was supported by the evidence, and Finberg=s fourth issue is overruled.

    Finberg=s fifth issue argues that the trial court erred in entering judgment in favor of DCI (i.e., jointly with Buckner) because the jury found in question 15 that DCI suffered no damages.  Although Finberg and Roca=s motion for new trial challenged the sufficiency of the evidence to prove the damages awarded in question 15, Finberg has not cited, and we have not found, any portion of the record where he or Roca objected to the entry of judgment in favor of DCI as being contrary to the verdict or otherwise presented this complaint to the trial court.  Accordingly, Finberg=s fifth issue presents nothing for our review and is overruled.

                                                                     Attorney=s Fees

    Roca=s sole issue argues that, because it successfully defended itself against DCI=s and Buckner=s breach of contract claim, it was entitled to attorney=s fees under paragraph 7.05 of the employment agreement, which states, AIn the event that either party is required to enforce this Agreement by suit in any court of law, the prevailing party shall be entitled to attorney=s fees and court costs.@ Therefore, Roca requests that we reverse and render judgment awarding it the attorney=s fees found by the jury in response to question 17.

    However, question 17 asked the jury to determine the amount of attorney=s fees incurred by Roca Ain the filing and presentation of their [sic] claims under the contract@ (emphasis added). Although Roca asserted a counterclaim against Buckner for breach of contract, the jury found that Buckner had not breached the contract.  Therefore, Roca was not the prevailing party on its claims, and did not obtain a jury finding on the amount of its attorney=s fees for defending against Buckner=s claims.  Therefore, the trial court did not err in awarding Roca no attorney=s fees for defending against Buckner=s claims, and this issue is overruled.

                                                              Buckner / DCI Appeal

                                                                 Charge Instruction

    Buckner and DCI=s first issue argues that the trial court erred by refusing their proposed limiting instruction on whether Roca=s breach of the contract was excused.  As noted previously, the excuse instruction accompanying question 2 instructed the jury that a failure by Roca to comply with the contract was excused if Roca had good cause for discharging Buckner.  Buckner and DCI contend that, even though the charge defined the three agreements as a single contract, the termination provision in the employment agreement did not also apply to the commission agreement, which was not otherwise terminable. Buckner and DCI thus request this court to disregard the answer to jury question 2 and render judgment against Roca for breach of contract liability, damages, and attorney=s fees.

    Although Buckner and DCI objected to the excuse instruction at the charge conference, they received a favorable verdict from the jury on their tortious interference claim and then filed a motion for entry of the judgment that the trial court subsequently entered (except as to exemplary damages, discussed in the following section).  By filing their motion that the trial court render judgment on the tortious interference finding and damages awarded by the jury (and not render judgment on the breach of contract claim, as they now request), Buckner and DCI cannot, on appeal, take a position inconsistent with that request for judgment.  See Litton Indus. Prods., Inc. v. Gammage, 668 S.W.2d 319, 321-22 (Tex. 1984).  Rather, if they wished to proceed to judgment for the purpose of initiating the appellate process, but without being bound by the terms of the judgment they requested, they were required to qualify their request for judgment accordingly.  See First Nat=l Bank of Beeville v. Fojtik, 775 S.W.2d 632, 633 (Tex. 1989).  Accordingly, by unqualifiedly requesting entry of judgment exclusively on the jury=s tortious interference finding, Buckner and DCI abandoned any claim to an inconsistent judgment, and their first issue is overruled.

                                                                Exemplary Damages

    Buckner and DCI=s second issue argues that the trial court erred by disregarding (without explanation) the jury=s finding of malice or fraud and thereby refusing to render judgment on the parties= stipulation of the amount of exemplary damages.  Question 18 of the charge, the relevant portions of its instructions and definitions, and the jury=s answer to it were as follows:

    Do you find by clear and convincing evidence that the harm caused to Buckner resulted from malice or fraud?

    AClear and convincing evidence@ means the measure or degree of proof that produces a firm belief or conviction of the truth of the allegations sought to be established.

     

    AMalice@ means:

    a.         A specific intent by ROCA or Finberg to cause substantial injury to Buckner; or

    b.         An act or omission by ROCA or Finberg[:]

    (i)        when viewed objectively from the standpoint of ROCA or Finberg at the time of its occurrence, involved an extreme degree of risk, considering the probability and magnitude of the potential harm to others; and

    (ii)       of which ROCA or Finberg had an actual, subjective awareness of the risk involved, but nevertheless proceeded with conscious indifference to the rights, safety, or welfare of others [Aconscious indifference@].[[12]]

    *          *          *          *

    Answer AYes@ or ANo@ as to:

    a.         ROCA:                  No

    b.         Finberg:                Yes


    A jury=s answer may be disregarded by a trial court only if the answer has no support in the evidence or the question is immaterial.  Southeastern Pipe Line Co. v. Tichacek, 997 S.W.2d 166, 172 (Tex. 1999).  Because there is no contention in this case that question 18 was immaterial,[13] we will first consider whether the answer had any support in the evidence.  In conducting a no evidence review, we view the evidence in a light that tends to support the finding and disregard all evidence and inferences to the contrary. Lenz v. Lenz, 79 S.W.3d 10, 13 (Tex. 2002).  However, meager circumstantial evidence from which equally plausible but opposite inferences may be drawn is speculative and thus legally insufficient to support a finding. Wal-Mart Stores, Inc. v. Gonzalez, 968 S.W.2d 934, 936 (Tex. 1998).

    In this case, Buckner and DCI contend that the question 18 finding was supported by evidence showing conscious indifference. Question 18 was predicated upon the jury=s affirmative answer to question 13.[14]  The definitions preceding question 13 defined an intentional interference with a contract as one in which the person desires to interfere, or knows that his action will interfere, with the contract.  We construe the conscious indifference definition in question 18 as requiring more culpable conduct than that necessary to prove intentional interference in question 13.[15]

    Although the discussion of this issue in Buckner and DCI=s brief contains three pages characterizing the purported evidence to support their claim of conscious indifference, few of these assertions contain record cites, and those that do so cite only to plaintiffs= exhibits 1, 2, 3, 10, 11, and 12 (the Areferenced exhibits@).[16]

    The six referenced exhibits consist of the three agreements plus three letters in which Finberg communicated to Buckner: (1) the termination of the agreements due to Buckner=s allegedly inadequate performance; (2) the date Buckner=s employee insurance coverage would be cancelled; and (3) an offer for a lower paying position at Roca.  There is nothing in the tone or content of these letters that would support an inference of conscious indifference, as defined by the charge.  Accordingly, Buckner and DCI=s second issue does not demonstrate error by the trial court in disregarding the finding on question 18 and is overruled, and the judgment of the trial court is affirmed.

     

     

     

    /s/        Richard H. Edelman

    Justice

     

    Judgment rendered and Opinion filed October 24, 2002.

    Panel consists of Justices Hudson, Fowler, and Edelman.

    Do Not Publish C Tex. R. App. P. 47.3(b).

     

     


    [1]           See, e.g., Powell Indus., Inc. v. Allen, 985 S.W.2d 455, 457 (Tex. 1998).

    [2]           See Baker v. Welch, 735 S.W.2d 548, 548-50 (Tex. App.CHouston [1st Dist.] 1987, writ dism=d) (reversing and rendering take nothing judgment on tortious interference claim by lessee against defendant who was founder, sole shareholder, and president of lessor corporation because defendant and corporation had no separate identities such that defendant could be a third party capable of interfering with the contracts of the corporation).

    [3]           Other grounds asserted in the motions are not germane to this issue.

    [4]           Finberg does not assert this Amatter of law@ point on appeal.

    [5]           See, e.g., Fort Worth Indep. Sch. Dist. v. City of Fort Worth, 22 S.W.3d 831, 840 (Tex. 2000) (noting that agreements pertaining to the same transaction may be read together to ascertain the parties= intent, and in appropriate circumstances, a court may determine, as a matter of law, that multiple documents comprise a single written contract and construe them accordingly).

    [6]           In essence, Finberg is arguing that the finding of tortious interference is contrary to the evidence and jury=s findings on the breach of contract claim.

    [7]           Cf. Juliette Fowler Homes, Inc. v. Welch Assocs., Inc., 793 S.W.2d 660, 666-67 (Tex. 1990) (holding that tortious interference can include inducing a party to exercise its contractual right to terminate a contract); Restatement (Second) of Torts ' 766 cmt. g (1979) (recognizing that a defendant may not improperly interfere with a contract that is terminable at will).

    [8]           Finberg does not challenge the sufficiency of the evidence to prove that he interfered with any party=s performance of the contract.

    [9]           In conducting a legal sufficiency review, we review the evidence in a light that tends to support the finding of the disputed facts and disregard all evidence and inferences to the contrary.  Lee Lewis Constr., Inc. v. Harrison, 70 S.W.3d 778, 782 (Tex. 2001).  If more than a scintilla of evidence exists, it is legally sufficient. Id.  More than a scintilla of evidence exists if the evidence furnishes some reasonable basis for differing conclusions by reasonable minds about a vital fact=s existence.  Id. at 782-83.  When considering a factual sufficiency challenge to a jury=s verdict, we consider all of the evidence and may set aside the verdict only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. Mar. Overseas Corp. v. Ellis, 971 S.W.2d 402, 406-07 (Tex. 1998).  Because a court of appeals is not a fact finder, we may not pass upon the witnesses= credibility or substitute our judgment for that of the jury, even if the evidence would clearly support a different result.  Id. at 407.  In the absence of an objection to the relevant portion of the jury charge, we review the sufficiency of the evidence by reference to the charge submitted. Bradford v. Vento, 48 S.W.3d 749, 754 (Tex. 2001).

    [10]          Similar charge language is used where a trial court has determined that a contract provision is ambiguous, and the meaning of the provision is therefore a fact question to be decided by the jury.  See Comm. on Pattern Jury Charges, State Bar of Tex., Texas Pattern Jury Charges PJC 101.8 (2000); see also Lenape Res. Corp. v. Tenn. Gas Pipeline Co., 925 S.W.2d 565, 574 (Tex. 1996).  However, because this prefatory instruction did not set forth or refer to any particular provision of the contract to be interpreted, it authorized the jury to decide the meaning of any portions of the three agreements that had not otherwise been construed in the charge.  Similarly, as noted above, even if the contract was terminable by Roca, as the breach of contract portion of the charge indicated, the charge allowed Buckner to recover his lost contract benefits for the tortious interference found by the jury.

    [11]          This figure is reached by adding $5,000 per month for the three months of August, September, and October of 1996 and $2,000 per month for the remaining 57 months.  The jury apparently awarded no interference damages for salary or commissions under the employment agreement.

    [12]          Although not relevant to this issue on appeal, question 18 also contained the following definition of fraud:

    AFraud@ occurs when -

    a.          A party makes a material misrepresentation;

    b.         The misrepresentation is made with knowledge of its falsity or made recklessly without any knowledge of the truth and as a positive assertion,

    c.         The misrepresentation is made with the intention that it should be acted on by the other party; and

    d.         The other party acts in reliance on the misrepresentation and thereby suffers injury.

    AMisrepresentation@ means -

    a.          A false statement of fact; or

    b.         A promise of future performance made with an intent not to perform as promised; or

    c.         A statement of opinion that the maker knows to be false.

     

    [13]          A question is immaterial when it should not have been submitted, calls for a finding beyond the province of the jury, such as a question of law, or was properly submitted but has been rendered immaterial by other findings.  Southeastern Pipe Line, 997 S.W.2d at 172.

    [14]          The other questions upon which question 18 could have been predicated were all answered negatively by the jury.

    [15]          Conversely, to the extent that the minimum conduct necessary to satisfy the definition of intentional interference in question 13 would also constitute conscious indifference in question 18, question 18 would be immaterial, and exemplary damages would be recoverable for any conduct that would support actual damages.  See Transp. Ins. Co. v. Moriel, 879 S.W.2d 10, 18 (Tex. 1994) (AEvery tort involves conduct that the law considers wrong, but punitive damages are proper only in the most exceptional cases.@); Ware v. Paxton, 359 S.W.2d 897, 899 (Tex. 1962) (AThe fact that an act is unlawful is not of itself ground for an award of exemplary or punitive damages.@).

    [16]          The argument supporting each issue in an appellant=s brief must contain appropriate citations to the record.  See Tex. R. App. P. 38.1(h).  It is thus not the obligation of the appeals court to search the record for supporting evidence or to search other portions of the brief for supporting citations to the record; nor would we be maintaining our position of impartiality to undertake such efforts on a party=s behalf.