Alfonso v. Gulf Publ'g Co.

• Decision Date: 10 May 2012
• Docket Number: Nos. 2009–CA–01457–SCT, 2010–CA–00091–SCT.,s. 2009–CA–01457–SCT, 2010–CA–00091–SCT.
• Parties: Thomas R. ALFONSO, III and Anne Alfonso d/b/a Bay Jourdan Publishing Company v. GULF PUBLISHING CO., INC. and the Sun Herald. Thomas R. Alfonso, III and Anne Alfonso d/b/a Bay Jourdan Publishing Company v. Diamondhead Country Club and Property Owners Association, Inc.
• Court: Mississippi Supreme Court

87 So.3d 1055

40 Media L. Rep. 1811

Thomas R. ALFONSO, III and Anne Alfonso d/b/a Bay Jourdan Publishing Company

v.GULF PUBLISHING CO., INC. and the Sun Herald.

Thomas R. Alfonso, III and Anne Alfonso d/b/a Bay Jourdan Publishing Company

v.Diamondhead Country Club and Property Owners Association, Inc.

Nos. 2009–CA–01457–SCT, 2010–CA–00091–SCT.

Supreme Court of Mississippi.

May 10, 2012.

David Neil McCarty, attorney for appellants.

Keith R. Raulston, Jackson, Henry Laird, William V. Westbrook, III, Gulfport, attorneys for appellees.

Before DICKINSON, P.J., CHANDLER and KING, JJ.

ON MOTION FOR REHEARING

CHANDLER, Justice, for the Court:

¶ 1. The motion for rehearing is denied. The original opinion is withdrawn, and this opinion is substituted.

¶ 2. These two appeals are from consolidated chancery-court cases. In the first case, Diamondhead Country Club and Property Owners Association, Inc. (“Diamondhead”) sued Thomas R. Alfonso, III, and Anne Scafidi Cordova,¹ d/b/a Bay Jourdan Publishing Co. (“BJP”) for breach of a contract to publish The Diamondhead News. On July 2, 1997, the chancery court entered a preliminary injunction order preventing BJP from publishing The Diamondhead News, selling advertising for The Diamondhead News, collecting or disposing of advertising revenues derived from the publication of The Diamondhead News, and interfering with the printing, publication, or distribution of The Diamondhead News. The chancery court also found that an arbitration clause in the publishing contract was inapplicable to the lawsuit. The chancery court denied BJP's two subsequent motions to compel arbitration of the breach-of-contract dispute. BJP appeals from the chancery court's latest denial of arbitration.

¶ 3. In the second case, BJP sued Diamondhead and Gulf Publishing Co., Inc., d/b/a The Sun Herald (“Gulf Publishing”), for intentional interference with the publishing contract. Gulf Publishing filed a motion for summary judgment. The court granted summary judgment to Gulf Publishing and directed the entry of a final judgment as to Gulf Publishing pursuant to Mississippi Rule of Civil Procedure 54(b). BJP appeals from the grant of summary judgment.

¶ 4. We affirm the chancery court's order denying BJP's third motion to compel arbitration because the issue was ruled upon previously, and no appeal was taken. Finding genuine issues of material fact for trial, we reverse the chancery court's order granting summary judgment to Diamondhead and Gulf Publishing, and remand this case for further proceedings.

FACTS

A. Diamondhead v. BJP

¶ 5. On November 4, 1996, Diamondhead and BJP entered into a contract providing for BJP's publication of The Diamondhead News. Diamondhead filed a complaint for breach of contract on June 19, 1997, requesting preliminary and permanent injunctive relief against BJP. Diamondhead complained that BJP had breached the contract because it had withdrawn funds from the parties' joint bank account and had deposited them in BJP's private account, had failed to produce a detailed accounting upon request, had superceded Diamondhead's editorial control by publishing content unapproved by Diamondhead, and had used an unauthorized mailing list. At a hearing on July 1, 1997, BJP requested to arbitrate the dispute pursuant to the contract's arbitration clause. On July 2, 1997, the chancellor granted the preliminary injunction, finding that

(a) BJP refused to use the designated joint venture's account, they placed joint venture funds in a private account, and refused to remedy the situation by meeting with the Board or meeting at the bank; (b) BJP refused to provide an accounting timely ...; (c) BJP has apparently sold advertising for the July issue and neither placed those funds in the joint account or produced an accounting; and, (d) BJP has breached the editorial control provisions of the agreement by publishing the July paper.

The chancellor entered a preliminary injunction enjoining BJP from publishing The Diamondhead News, selling advertising for The Diamondhead News, collecting or disposing of advertising revenues derived from the publication of The Diamondhead News, and interfering with the printing, publication, or distribution of The Diamondhead News. The chancellor rejected BJP's request for arbitration, finding that the arbitration clause did not prevent Diamondhead from seeking equitable relief in chancery court. BJP did not appeal the chancellor's denial of arbitration.

¶ 6. On June 29, 2001, BJP filed a “Motion To Dismiss and a Motion to Stay Proceeding and To Compel Arbitration.” On March 24, 2005, the chancellor overruled the motion, finding that BJP had waived its right to demand arbitration. BJP failed to appeal from this order. On August 5, 2009, BJP filed another “Motion To Dismiss, or in the Alternative to Stay and Compel Arbitration.” The chancellor overruled that motion on December 6, 2009. Applying our decision in MS Credit Center, Inc., v. Horton, 926 So.2d 167 (2006), the chancellor held that BJP had waived its right to arbitration through “substantial and active participation in the judicial process.” BJP has appealed from that order.

B. Alfonso v. Gulf Publishing

¶ 7. Gulf Publishing publishes The Sun Herald newspaper, which circulates in South Mississippi. Gulf Publishing began publishing The Diamondhead News in August 1997. On June 12, 2000, BJP commenced a circuit court action against Diamondhead and Gulf Publishing. BJP alleged that Gulf Publishing had intentionally interfered with BJP's contract to publish The Diamondhead News. Specifically, BJP alleged that, before the chancery court entered the preliminary injunction, Diamondhead and Gulf Publishing had been negotiating for Gulf Publishing to publish The Diamondhead News, contingent upon Diamondhead's termination of the contract with BJP. On February 8, 2001, the circuit court transferred the case to the Chancery Court of Hancock County.

¶ 8. Gulf Publishing moved for summary judgment. It asserted that Diamondhead had terminated its contract with BJP prior to any negotiations between Diamondhead and Gulf Publishing. It attached testimony from the transcript of the June 30, 1997, preliminary injunction hearing to show that no negotiations between Diamondhead and Gulf Publishing had occurred prior to June 1997. In the transcript, a member of the Diamondhead board of directors testified that it was only after Diamondhead's relationship with BJP had broken down that Diamondhead had contacted Gulf Publishing to publish the next month's newsletter.

¶ 9. Gulf Publishing also produced a letter dated June 5, 1997, from Diamondhead to BJP that notified BJP of its intention to terminate the publishing contract. That letter stated, “effective immediately the contract between Diamondhead Country Club & Property Owners Association, Inc., and the Bay Jourdan Publishing Company is cancelled due to the following reasons: ...” However, Section XVI of the publishing contract between Diamondhead and BJP, titled “Termination for material breach,” provided for termination upon sixty days' written notice and opportunity to cure. That section stated:

This agreement may be terminated by any party for the material breach of any other party. The party intending to terminate shall give the defaulting party sixty (60) days' written notice specifying with particularity the condition, act, omission, or course of conduct asserted to constitute such material breach. The agreement may not be terminated under this provision if during such sixty (60)-day period the defaulting party has cured, corrected, or eliminated such material breach or has taken steps to cure, correct, or eliminate such material breach, which steps, if diligently prosecuted to a conclusion, are reasonably designed to effect a cure, correction or elimination.

Gulf Publishing also argued that BJP could not prove proximate causation because the preliminary injunction order effectively had terminated the contract and had made it impossible for Gulf Publishing to have damaged BJP.

¶ 10. In response, BJP argued that in June 1997, the contract's status had been disputed and that the preliminary injunction had not terminated the contract, but only suspended its operation. BJP produced two documents supporting its intentional-interference claim. In a “letter to the community,” published in The Diamondhead News in 2000, Frank Jerome stated that while he was the interim general manager of the Diamondhead Property Owners' Association, he had “arranged a meeting and Rene Duffour and I met with them one late afternoon. Out of this meeting came an agreement that the Sun Herald would bear all expenses in getting out our monthly newspaper.” BJP also presented a faxed letter, dated June 6, 1997, from Gulf Publishing to Diamondhead.² That letter stated, in pertinent part:

Gulf Publishing Company is interested in publishing The Diamondhead News. We are particularly pleased that you came to us first ... we are certain your current publisher was not in a profitable situation with this product based on the numbers we developed.... Since we are proposing to start our formal relationship in August, we propose that we print for your association, at no cost to the association, 5,000 copies.... Call this a good will gesture for our August marriage.

¶ 11. BJP argued that its two pieces of evidence—the published letter by Jerome and the June 6, 1997, letter from Gulf Publishing to Diamondhead—showed negotiations between Diamondhead and Gulf Publishing before the July 2, 1997, preliminary injunction, and created a genuine issue of material fact as to whether Gulf Publishing proximately had caused damage to BJP due to interference with its publishing contract with Diamondhead that culminated in Diamondhead's pursuit of a preliminary injunction.

¶ 12. The chancellor granted summary judgment in favor of Gulf Publishing, finding that because the preliminary injunction was entered against BJP, ...