Natco, Inc. v. Williams Brothers Engineering Company

• Decision Date: 28 March 1974
• Docket Number: No. 73-1604.,73-1604.
• Citation: 489 F.2d 639
• Parties: NATCO, INC., Plaintiff-Appellee-Cross Appellant, v. WILLIAMS BROTHERS ENGINEERING COMPANY, et al., Defendants-Third Party Plaintiffs-Appellants-Cross Appellees, v. SANTA FE PIPE LINE COMPANY, Third Party Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

489 F.2d 639 (1974)

NATCO, INC., Plaintiff-Appellee-Cross Appellant, v. WILLIAMS BROTHERS ENGINEERING COMPANY, et al., Defendants-Third Party Plaintiffs-Appellants-Cross Appellees, v. SANTA FE PIPE LINE COMPANY, Third Party Defendant-Appellee.

No. 73-1604.

United States Court of Appeals, Fifth Circuit.

February 13, 1974.

Rehearing Denied March 28, 1974.

Roy C. Snodgrass, Jr., Amarillo, Tex., John S. Estill, Jr., Tulsa, Okl., for Williams Bros. Engineering Co. and others.

Robert L. Templeton, R. C. Hamilton, Amarillo, Tex., for Natco.

Albert S. Tabor, James W. McCartney, Houston, Tex., J. L. McMicken, Amarillo, Tex., for Santa Fe.

Before BELL, COLEMAN and RONEY, Circuit Judges.

BELL, Circuit Judge:

This appeal and cross-appeal are from a judgment for plaintiff Natco, Inc. and against Williams Brothers Engineering Company in a suit based on diversity jurisdiction. Only one issue of substance is presented: Was the proof of loss of profits on the Odessa job sufficient to warrant submission of the claim to the jury? The other assignments of error will be stated and affirmed without extended discussion.

The suit presented a claim for an intentional tort. Plaintiff's cause of action, amply supported by proof, was that defendant Williams Brothers Engineering Company willfully and maliciously interfered with plaintiff's performance of a contract with Santa Fe Pipe Line Company.

The suit, as originally instituted, included a count against Santa Fe on a claim arising under the contract and another count against The Williams Companies and its assignee, Williams Brothers Engineering Company (Williams Brothers), for damages arising out of the alleged intentional tort. The claim against Santa Fe was settled and the complaint was amended to eliminate Sante Fe as a defendant.

Santa Fe was engaged in constructing a liquified petroleum gas pipeline system called "The Chapparal System" running from Hobbs, New Mexico to Houston, Texas. Santa Fe contracted with The Williams Companies to furnish engineering services on the job and to supervise the construction of the system. Williams assigned all its interest in the contract to Williams Brothers Engineering Company. Meanwhile, Santa Fe had contracted with plaintiff to construct two portions of the pipeline, one portion known as the "Conroe Job" being approximately 66 miles of pipeline, and the other being known as "Odessa Job" consisting of approximately 36 miles.

The trial was to a jury on special issues with a verdict being returned for plaintiff in the sum of $94,000 for losses sustained on the Odessa job, $100,000 for loss of profits on the Odessa job, $40,000 for damages sustained on the Conroe job, and exemplary damages in the amount of $150,000. The district court required a remittitur of the damages on the Conroe job and reduced the exemplary damages on a proportionate basis to $125,000.

The verdict and judgment was against Williams Brothers Engineering Company but not against The Williams Companies. Judgment was entered for Santa Fe on the claim of Williams Brothers Engineering Company against it as a third party defendant, the jury having found in the negative on the issue whether the arbitrary or unreasonable conduct of the employees of Williams Brothers was with the authorization or acquiescence of Santa Fe.

Preliminarily, we find no merit in the contention of Williams Brothers that this finding by the jury as to Santa Fe was not based on sufficient evidence. We also find without merit the cross-appeal of plaintiff based on the contention that the trial court erred in requiring a remittitur as to the damages on the Conroe job and reducing the exemplary damages. There was no basis for the finding of damages on the Conroe job. The district court was well within its discretion in reducing the exemplary damages on a basis proportionate to the actual damages found. Plaintiff also contends on cross-appeal that the trial court erred in failing to pierce the corporate veil of The Williams Companies so as to hold it in judgment along with Williams Brothers Engineering Company. There was no evidentiary basis for piercing the corporate veil.

This leaves for consideration the $94,000 awarded for losses on the Odessa job and the award for lost profits on that job in the amount of $100,000. We find the proof entirely sufficient to sustain the verdict for actual losses on the Odessa job. The evidentiary basis for the loss of profits in the amount of $100,000 is a much closer matter.

We begin with the rule that proof of loss of profits must rise above the level of mere surmise and conjecture and the contemplated profit must be proved to be reasonably certain. Autrey v. Williams and Dunlap, 5 Cir., 1965, 343 F.2d 730, 742. But in Mechanical Wholesale,...