941 F.2d 1068 (10th Cir. 1991), 90-6110, John A. Henry & Co., Ltd. v. T.G. & Y. Stores Co.

Docket Nº:90-6110.
Citation:941 F.2d 1068
Party Name:JOHN A. HENRY & CO., LTD., Plaintiff-Appellee, v. T.G. & Y. STORES CO.; McCrory Corporation; Sterik Co., Defendants-Appellants, and John A. Henry, III, an individual, Counterclaim-Defendant.
Case Date:August 12, 1991
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit

Page 1068

941 F.2d 1068 (10th Cir. 1991)

JOHN A. HENRY & CO., LTD., Plaintiff-Appellee,


T.G. & Y. STORES CO.; McCrory Corporation; Sterik Co.,



John A. Henry, III, an individual, Counterclaim-Defendant.

No. 90-6110.

United States Court of Appeals, Tenth Circuit

August 12, 1991

Page 1069

[Copyrighted Material Omitted]

Page 1070

John T. Edwards (Randall A. Breshears, also of Monnet, Hayes, Bullis, Thompson & Edwards, with him on the briefs), Oklahoma City, Okl., for defendants-appellants.

Anton J. Rupert (Mark S. Grossman and Robert E. Bacharach, also of Crowe & Dunlevy, with him on the brief), Oklahoma City, Okl., for plaintiff-appellee.

Before LOGAN, BRIGHT [*] and BALDOCK, Circuit Judges.

LOGAN, Circuit Judge.

Defendants, T.G. & Y. Stores Co., McCrory Corporation, and Sterik Co., appeal a jury verdict awarding actual and punitive damages to John A. Henry & Co., Ltd. (Henry) for breach of contract and wrongful interference with contract. On appeal, defendants contend that the district court erred by (1) submitting Henry's contract claim to the jury; (2) failing to grant a directed verdict or judgment n.o.v. on Henry's wrongful interference with contract claim; (3) permitting an award of punitive damages in excess of actual damages; and (4) giving the jury copies of the instructions the day before their deliberations. We affirm.


This case arose out of a 1979 lease agreement for a T.G. & Y. store at a shopping center owned by Henry in Yukon, Oklahoma. Henry promised to build, at its expense, a 60,000 square-foot building in exchange for T.G. & Y.'s promise to enter into a twenty-year lease. To enable Henry to obtain funding for the building's construction, the lease prohibited T.G. & Y. from halting rental payments, even in the event of a landlord default, for as long as Henry owned the property. By pledging the lease as security, Henry was able to borrow approximately $1.5 million to construct the building.

T.G. & Y. first occupied the building in 1981 and began making the required rental payments. In 1986, McCrory Corporation acquired T.G. & Y., including all of its stores throughout the United States. 1 As part of a change in business philosophy and to strengthen itself financially, McCrory planned to close all of the T.G. & Y. large family stores, including the one on the Henry lease, and focus only on smaller store operations. McCrory closed 202 stores but was able to sublease or assign only 46 of the stores' leases. McCrory then employed Sterik Company to address the remaining lease obligations.

Sterik attempted to terminate the majority of the remaining leases by withholding rent and offering lump-sum payments in exchange for lease cancellations. McCrory sent Henry a closure notice and offered a cash payment to cancel the lease. The parties failed to reach an agreement, however, and in March 1987, McCrory withheld its $14,250 monthly rental payment. McCrory then wrote a letter to Henry which contained several false allegations of maintenance defects, 2 sending a copy of this letter to Southland Insurance Company (Southland), Henry's lender. When Southland received this letter it insisted that Henry correct any existing defects.

McCrory again withheld the rent for the month of April 1987. Henry was forced to request relief from Southland because it was unable to pay the mortgage without McCrory's rental payments. At McCrory's request and in exchange for payment of the March and April rent, Henry met with a consultant paid by a corporation set up by Sterik to discuss cancellation of the lease, but again no agreement was reached. Thereafter, McCrory withheld rent from July 1987 to March 1988. Henry avoided foreclosure during this period by restructuring its loan.

Page 1071

Because of Henry's continued persistence in holding McCrory to the terms of the lease...

To continue reading