Adolph Coors Co. v. Rodriguez

• Citation: 780 S.W.2d 477
• Decision Date: 16 November 1989
• Docket Number: No. 13-88-316-CV,13-88-316-CV
• Parties: 10 UCC Rep.Serv.2d 299 ADOLPH COORS COMPANY and Larry Lightfoot, Appellants, v. Joe A. RODRIGUEZ and R & R Coors Distributing Company, d/b/a, Coors R & R Distributing Company, Appellees.
• Court: Court of Appeals of Texas

Page 477

780 S.W.2d 477

10 UCC Rep.Serv.2d 299

ADOLPH COORS COMPANY and Larry Lightfoot, Appellants, v. Joe A. RODRIGUEZ and R & R Coors Distributing Company, d/b/a, Coors R & R Distributing Company, Appellees.

No. 13-88-316-CV.

Court of Appeals of Texas,

Corpus Christi.

Nov. 16, 1989.

Rehearing Overruled Dec. 14, 1989.

Harry M. Reasoner, Alison Smith, Christine E. Cleveland, Marie R. Yeates, Vinson & Elkins, Houston, Frank E. Perez, Royston, Rayzor, Vickery & Williams, Brownsville, Victor Boog, Leo Bradley, Bradley, Campbell & Carney, Golden, Colo., for appellants.

Dana Kirk, Don M. Kennedy, Kirk & Carrigan, P.C., Mitchell Chaney, Rodriguez, Colvin and Chaney, Brownsville, for appellees.

Before UTTER, SEERDEN and DORSEY, JJ.

OPINION

UTTER, Justice.

The Adolph Coors Company (Coors) and Larry Lightfoot, former Coors divisional sales manager, appeal from a judgment rendered against them in favor of R & R Coors Distributing Company (R & R) and Joe Rodriguez, the managing partner of R & R. We reverse the judgment of the trial court and render judgment that R & R and Rodriguez take nothing.

R & R and Rodriguez alleged causes of action against Coors and Lightfoot for breach of the distributorship contract, violation of the Texas Deceptive Trade Practices Act (DTPA), Tex.Bus. & Com.Code Ann. §§ 17.41--17.63 (Vernon 1987), violation of the Beer Industry Fair Dealing Law, Tex.Alco.Bev.Code Ann. §§ 102.71--102.81 (Vernon Supp.1989) (BIFDL), breach of the duty of good faith and fair dealing, negligence, tortious interference with the proposed sales of the distributorship, conspiracy, and libel and slander.

At trial, the court granted an instructed verdict for Coors on R & R's claims for breach of contract and violation of the DTPA. No appeal has been perfected from this action of the trial court. The trial court then submitted R & R's claims against Coors under BIFDL, and for breach of good faith, negligence, tortious interference and conspiracy. The trial court also submitted R & R's claim against Coors for libel and slander.

Judgment was granted on the verdict that R & R recover from Coors $1,500,000 as compensation for the value of the distributorship under BIFDL, $1,500,000 for actual damages resulting from Coors' breach of the duty of good faith, negligence, tortious interference and conspiracy, and $10,000,000 in punitive damages. R & R also recovered $350,000 against Lightfoot individually on the tortious interference claim, provided that R & R could only recover $1,500,000 in total against Coors and Lightfoot as actual damages. In addition, Rodriguez individually recovered against Coors $1,000,000 in punitive damages on the defamation claim though he sustained no actual damages. Finally, the trial court ordered R & R to convey the distributorship back to Coors upon payment by Coors to R & R of the $1,500,000 BIFDL compensation award. Coors and Lightfoot appeal this judgment by forty-three points of error.

By their thirteenth, fourteenth and sixteenth points of error, appellants challenge the legal and factual sufficiency of the evidence to support the jury's findings that Coors terminated R & R without good cause and that Coors unreasonably withheld or delayed its approval of a sale of R & R.

In considering a "no evidence", "insufficient evidence" or "against the great weight and preponderance of the evidence" point of error, we will follow the well-established test set forth in Pool v. Ford Motor Co., 715 S.W.2d 629 (Tex.1986); Dyson v. Olin Corp., 692 S.W.2d 456 (Tex.1985); Glover v. Texas General Indemnity Co., 619 S.W.2d 400 (Tex.1981); Garza v. Alviar, 395 S.W.2d 821 (Tex.1965); Allied Finance Co. v. Garza, 626 S.W.2d 120 (Tex.App.--Corpus Christi 1981, writ ref'd n.r.e.); and Calvert, No Evidence and Insufficient Evidence Points of Error, 38 Texas L.Rev. 361 (1960).

The record reflects that Coors notified R & R in March and May of 1987 of its intention to terminate R & R as a distributor on July 31, 1987. R & R claims that Coors then discouraged prospective purchasers from buying R & R and interfered with various attempts by Rodriguez to sell the distributorship. The threatened termination led to the present lawsuit, which initially resulted in a temporary injunction prohibiting Coors from terminating R & R.

The following jury questions were submitted and answered accordingly:

2. Do you find that Coors, but for the temporary injunction entered by this Court, terminated R & R as a distributor? "Yes."

2(a) Do you find Coors terminated R & R as a distributorship without good cause? "Yes."

2(b) Do you find that Coors unreasonably withheld or delayed its approval of any assignment, transfer, or sale of R & R's assets to another? "Yes."

In conjunction with these jury questions and referable to them, the court further inquired, and the jury answered, the following damages question:

11. What sum of money, if any, if paid now in cash, do you find from a preponderance of the evidence, would fairly and reasonably compensate R & R for the fair market value of the distributor's business with relation to the Coors brands, including "goodwill?"

ANSWER: "$1,500,000.00."

Through these jury questions, R & R attempted to establish a right to compensation under the statutory causes of action for wrongful termination and wrongfully withholding consent to a sale of the distributorship under the Beer Industry Fair Dealing Law (BIFDL). Tex.Alco.Bev.Code Ann. § 102.71-102.81 (Vernon Supp.1989).

Section 102.77(a) provides that:

Any Manufacturer who, without good cause, cancels, terminates, or fails to renew any agreement, or unlawfully denies approval of, or unreasonably withholds consent, to any assignment, transfer, or sale of a distributor's business assets or voting stock or other equity securities, shall pay such distributor with whom it has an agreement pursuant to Section 102.51 of this code the fair market value of the distributor's business with relation to the affected brand or brands.

Recently in Ace Sales Co. v. Cerveceria Modelo, S.A. de C.V., 739 S.W.2d 442, 447 (Tex.App.--Corpus Christi 1987, writ denied) we applied to BIFDL the long recognized rule that, if a cause of action and remedy for its enforcement are derived not from the common law but from a statute, the statutory provisions are mandatory and exclusive, and must be complied with in all respects or the action is not maintainable. See Texas Catastrophe Property Insurance Association v. Counsel of Co-owers of Saida II Towers Condominium Association, 706 S.W.2d 644, 646 (Tex.1986).

Under Section 102.77(a), no cause of action for wrongful termination accrues until an actual termination of the distributorship by the manufacturer. At trial, the evidence was undisputed that R & R had not been terminated and had remained a Coors distributor, and that Coors had been enjoined from terminating R & R. R & R seems to argue that Coors by its actions had, for all practical purposes, treated R & R as if it had been terminated as a distributor, and that R & R should not be required to wait for a formal termination to occur before pursuing a termination cause of action. We will not, however, extend the language of Section 102.77(a)'s termination provisions to include pre-termination wrongs by the manufacturer. There was no termination of R & R Distributorship and, therefore, there was no evidence to support the jury's answers to Jury Question 2(a).

R & R also contends, however, that the $1,500,000 award can be supported by the jury's finding in response to Jury Question 2(b), that Coors unreasonably withheld or delayed its consent to a sale of the distributorship, which gives rise to a separate cause of action, also under Section 102.77(a). Section 102.76(a) further defines when withholding or delaying consent to a sale would be unreasonable as, "whenever the person or persons to be substituted meet reasonable standards imposed not only upon the distributor but upon all other distributors of that manufacturer of the same general class."

We find no evidence that Coors unreasonably withheld or delayed its consent to any proposed sale of the distributorship. It was uncontroverted that none of the potential sales came to fruition and that neither R & R nor any of the prospective purchasers ever sent Coors a completed purchase agreement or applied to Coors for approval as a new owner, as required under the Sale of Distributorship clause of R & R's distributorship agreement with Coors. R & R relies solely on Coors' unwillingness to inject itself into the negotiation process with a prospective purchaser, Leonard May, with whom R & R had negotiated a letter of intent to buy the distributorship, contingent upon a number of factors. Rodriguez sent a copy of the letter of intent to Coors for immediate approval, but Coors responded by requesting that R & R follow the proper procedures for sale of a distributorship, which requires R & R and the prospective purchaser to send Coors a completed purchase agreement and distributorship application.

R & R's request for approval was clearly premature to any actual agreement for sale of the distributorship, and Coors' request that proper procedures be followed cannot be characterized as rejection or delay. Since its consent was never properly requested, Coors never had the opportunity to unreasonably withhold or delay its consent or even to investigate whether the prospective purchasers met reasonable standards imposed upon Coors distributors. There was no evidence to support the jury's answer to Jury Question 2(b).

Having found no evidence to support R & R's BIFDL causes of action, we hold that there is no basis to support the award of $1,500,000 pursuant to the jury's answer to Jury Question 11, which is referable only to the BIFDL causes of action. We sustain appellants' thirteenth, fourteenth and sixteenth points of error.

By their eleventh and twelfth points of error, appellants complain that the evidence is...