American Sanitary Service, Inc. v. Walker

• Decision Date: 05 October 1976
• Citation: 554 P.2d 1010,276 Or. 389
• Parties: , 97 A.L.R.3d 884 AMERICAN SANITARY SERVICE, INC., an Oregon corporation, Appellant, v. Dan WALKER, doing business as Walker's Disposal Service, Respondent.
• Court: Oregon Supreme Court

Page 1010

554 P.2d 1010

276 Or. 389, 97 A.L.R.3d 884

AMERICAN SANITARY SERVICE, INC., an Oregon corporation, Appellant, v. Dan WALKER, doing business as Walker's Disposal Service, Respondent.

Supreme Court of Oregon, Department 2.

Argued and Submitted June 11, 1976.

Oct. 5, 1976.

John M. Berman, Portland, argued the cause for appellant. With him on the briefs were Ehrbert H. Anderson, and Dezendorf, Spears, Lubersky & Campbell, Portland.

John C. Anicker, Jr., Oregon City. argued the cause and filed a brief for respondent.

Before DENECKE, C.J., and O'CONNELL, HOLMAN and BRYSON, JJ.

BRYSON, Justice.

This is an action to recover damages for defendant's interference with plaintiff's contractual rights. Judgment was entered in favor of plaintiff on a jury's verdict. On motion, the trial court granted judgment in favor of defendant notwithstanding the verdict. ORS 18.140(1). The plaintiff appeals.

Plaintiff has an exclusive franchise with Clackamas County to provide waste disposal services for the unincorporated area surrounding the city of Estacada. Estacada attempted to annex part of the area covered by plaintiff's franchise. The annexation was stayed and subsequently declared invalid. Peterson v. Portland Met. Bdry. Com., 21 Or.App. 420, 535 P.2d 577 (1975). Defendant had the waste disposal franchise for Estacada and began servicing plaintiff's franchised area. Plaintiff brought suit against Estacada and obtained an injunction preventing Estacada's interference with its franchise. Defendant was advised that an injunction had been granted and that the annexation had been stayed. Plaintiff also informed defendant that it was servicing the disputed territory but defendant serviced the area, collected fees, and moved plaintiff's collection boxes. The county administrator directed the defendant to cease and desist the violation of plaintiff's franchise but defendant continued in violation of the franchise. Plaintiff then filed this action.

Plaintiff contends that '(t)he trial court erred in sustaining defendant's motion for judgment notwithstanding the verdict.'

The trial court, in its memorandum opinion, held 'that the facts alleged in the complaint did not constitute a cause of action for interference of a contractual relationship.' Defendant did not demur to the complaint and first contended that the complaint did not state a cause of action in his motion for judgment n.o.v. In Welter, Adm'x v. M & M Woodworking Co., 216 Or. 266, 279, 338 P.2d 651, 658 (1959), we stated:

'Belatedly, by motion for judgment notwithstanding the verdict, the defendant urged that the complaint does not state a cause of action. In view of the tardiness of the challenge, every reasonable intendment should be indulged in favor of the sufficiency of the pleading. * * *'

When the pleading is attacked for the first time after judgment, the entire record will be examined. Fulton Ins. v. White Motor Corp., 261 Or. 206, 219, 493 P.2d 138 (1972).

Plaintiff alleged and offered proof of (1) its exclusive franchise with Clackamas County to provide waste disposal service for the territory involved; (2) notice to defendant of its exclusive franchise to service the area; and (3) defendant's interference therewith.

Paragraph VIII of the complaint alleged:

'Plaintiff did recommence servicing said territory on June 1, 1974, and placed its pick-up boxes at the appropriate places. Defendant Dan Walker interfered with plaintiff's contractual relationship by moving plaintiff's pick-up boxes and by continuing to service said territory, and by offering to provide service for less than the rates which plaintiff was permitted to charge under its franchise.'

Although admitting that plaintiff's exclusive franchise agreement with Clackamas County 'may create a contractual or property right of some nature,' defendant argues that plaintiff must fail since it 'did not plead a contractual relationship with any of its customers or potential customers in the territory involved.' Defendant stated that it does not contest that plaintiff might have a cause of action for tortious interference with a business relationship; only that since plaintiff plead interference with a contractual relationship it must prove such a relationship.

Plaintiff's complaint placed defendant on notice of its exclusive three-party business arrangement-- plaintiff's exclusive franchise with the county and its servicing of the customers in the territory by virtue of the franchise.

Plaintiff's contractual relationship with Clackamas County was not directly breached or interfered with by defendant's actions. However, the plaintiff's business relationship with its customers, which it enjoyed by virtue of the exclusive franchise, was interfered with. Plaintiff still had its franchise with the county but its servicing of its customers thereunder was made more onerous and less profitable, thereby causing it damage.

Observing the entire record, we cannot see how plaintiff or defendant would have tried the case differently if the pleadings had been couched in different language, as contended by defendant after judgment.

It is not a prerequisite to the action that the third party promisor breach its contract with the plaintiff. The right to recover damages suffered as a result of a defendant's intentional interference with plaintiff's business interest has been recognized in this jurisdiction where defendant's wrongful actions have rendered plaintiff's obligations more onerous or prevented plaintiff from realizing the full benefit of his contract with a third party. Mandal v. Hoffman Const. Co., 270 Or. 248, 250--52, 527 P.2d 387 (1974) (citing Phez Co. v. Salem Fruit Union, 103 Or. 514, 551, 201 P. 222, 205 P. 270 (1922)). See also, cases collected in footnotes 26 and 27, Prosser, Law of Torts 935, 936, § 129 (4th ed. 1971); Developments in the Law, Competitive Torts, 77 Harv.L.Rev. 888, 959--64 (1964); Harper, Interference with Contractual Relations, 47 Nw.L.Rev. 873, 883--84 (1953); Carpenter, Interference with Contract Relations, 44 Harv.L.Rev. 728, 730--32 (1928). 'Any act injuring or destroying persons or property which retards or makes more difficult or prevents performance or makes performance of less value to the promisee, may fall within the scope of the tort.' 44 Harv.L.Rev. at 762.

In many respects this cause of action is analogous to the tort referred to as 'interference with contractual relations' if in fact it is not an extension thereof. Four factors limit the bringing of this type of action. First, the mere existence of a contract does not necessarily give rise to an interest protectable by an action for tortious interference. For instance, this cause of action will...