Brunswick Corporation v. Vineberg

• Decision Date: 11 January 1967
• Docket Number: No. 22907.,22907.
• Parties: BRUNSWICK CORPORATION, Appellant, v. Harold VINEBERG et al., Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

370 F.2d 605 (1967)

BRUNSWICK CORPORATION, Appellant, v. Harold VINEBERG et al., Appellees.

No. 22907.

United States Court of Appeals Fifth Circuit.

January 11, 1967.

James E. Tribble, Samuel Powers, Jr., Blackwell, Walker & Gray, Miami, Fla., for appellant.

Louis M. Jepeway, Bart L. Cohen, Schwarz & Cohen, and Jepeway & Gassen, Miami, Fla., for appellees Harold Vineberg and Sky Bowl Enterprises, Inc. Daniel Neal Heller, Miami, Fla., for appellee, Peter DeMet.

Walter Humkey, James S. Roth, Miami, Fla., Fowler, White, Gillen, Humkey & Trenam, Miami, Fla., of counsel, for appellee, Sky Corp.

Before BROWN, GEWIN and GOLDBERG, Circuit Judges.

GOLDBERG, Circuit Judge:

The initial transaction in this cause of action took place in the halcyon days of the bowling business. On April 11, 1961, Sky Bowl, Inc., ("Bowl"), a Florida corporation, admittedly controlled by defendants Vineberg and DeMet, Florida residents, entered into a conditional sales contract with Brunswick Corporation, a Delaware corporation with its principal place of business in Illinois, for the purchase of 32 bowling lanes and accessories. At the same time Bowl entered into a similar conditional sales contract with Brunswick Automatic Pinsetter Corporation for the purchase of 32 automatic pinsetters. Brunswick Automatic Pinsetter Corporation later merged into the Brunswick Corporation.

The lanes, pinsetters, and other equipment were installed in premises in Orlando, Florida, on which Bowl had a 20-year lease from the lessor, Sky Corporation ("Sky"), a Florida corporation.¹ After the equipment had been installed, Bowl operated a bowling business at the site. In the early months of 1964, Bowl fell behind in its payments, and Brunswick and Bowl's officers sought by negotiation to agree on another program of payment, but these negotiations failed.

Under the terms of the conditional sales agreements, the lanes, pinsetters, and accessories were to remain at the leased premises and were removable only by Brunswick upon the default of Bowl.² On July 23, however, after the failure of Bowl and Brunswick to renegotiate their contracts successfully, Bowl sent a letter to Brunswick advising it that Bowl had assigned its leasehold and sold all of its assets except the Brunswick equipment to Sky Bowl Enterprises, Inc., ("Enterprises") another Florida corporation; this letter further advised Brunswick to remove by July 31 the equipment which was the subject of the conditional sales contracts, or else that equipment would be removed and stored at Brunswick's expense. Brunswick did not act in response to this letter, and the equipment in question was then removed and stored by either Bowl or Enterprises, without Brunswick's consent. Bowl thereafter lapsed into economic quiescence.

Brunswick filed suit in District Court alleging that the removal of equipment was a breach of the conditional sales contracts, and that such removal was part of a willful scheme or conspiracy involving all of the defendants. The object of this scheme, according to the complaint, was to strip Bowl of its assets and thus of its ability to perform its contract with Brunswick, thereby allowing Bowl's successor, Enterprises, to purchase new bowling equipment from another source. The complaint charges that the defendants, Vineberg and DeMet, controlled both Bowl and Enterprises, and willfully, wantonly, and maliciously conspired to induce Bowl to break its covenant not to remove the Brunswick equipment, and to make a fraudulent transfer of its assets to Enterprises, which was voidable by Brunswick as a direct or indirect transfer of Bowl's properties to Vineberg and DeMet because Bowl should have held that property for the benefit of its creditor, Brunswick.

As to Sky Corporation, the lessor, the original complaint stated that Sky, "pursuant to the scheme or conspiracy herein alleged, agreed to an assignment of the said lease to Enterprises * * * which said lease was, by its terms, not assignable except with the consent of Sky * * *", and that Sky received from Vineberg a personal guaranty of a year's rent for the leased premises.

All defendants moved to dismiss the complaint. The trial judge dismissed the complaint against Sky only, with leave to Brunswick to amend, and denied the other motions.

Brunswick then amended its complaint as to Sky, claiming that Sky knew of the "terms and purposes" of the other defendants' scheme, that Sky "was an essential element of such scheme and conspiracy", repeating that Sky's consideration for consenting to the assignment of the lease was the personal guaranty by Vineberg of one year's rent.

After this amendment, Sky again moved to dismiss and dismissal was again granted, this time with prejudice.

The other defendants, Vineberg, DeMet, and Enterprises, then answered, admitting Bowl's contracts with Brunswick, the breach of those contracts, the July 23 letter to Brunswick, and the entry by Enterprises into the new contracts.

All remaining defendants then moved for summary judgment. At this time the record consisted only of the complaint with attached documents, the answers, and three depositions taken of corporate officers of Brunswick by the defendants. Summary judgment was granted. Brunswick now appeals both the dismissal of the complaint against Sky and the granting of summary judgment favoring Vineberg, DeMet, and Enterprises. We hold that the dismissal and summary judgments complained of were error.

I. The summary judgments in favor of Vineberg, DeMet, and Enterprises. A summary judgment is properly granted only where there is "no genuine issue as to any material fact and * * * the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). Neither of those conditions is present here.

The complaint's allegations of a scheme to divest Bowl of all of its valuable assets except the Brunswick equipment so that Brunswick's opportunity to collect on its debt was diminished, clearly bring the complaint within F.S.A. §§ 608.55 and 726.01,³ which are both concerned with conveyances in fraud of creditors. Livesay Industries, Inc., v. Livesay Window Co., 5 Cir. 1962, 305 F.2d 934.⁴

The complaint sounds also in the tort of inducing breach of contract. One of the alleged objectives of the conspiracy was the removal of Brunswick's equipment. Inherent in the efficacy of that conspiracy was the effective inducement of Bowl by the defendants to violate Bowl's covenant not to remove. This tort came into its own in Lumly v. Gye, 2 E11 & B1 216 (1853), and is now epitomized by Restatement, Torts, § 766.⁵

The Florida courts give a broad and inclusive scope to this tort, which is firmly established there. We give here a condensed review of the cases to show the breadth of the rule: Chipley v. Atkinson, 1887, 23 Fla. 206, 1 So. 934 (defendant maliciously induced plaintiff's employer to discharge plaintiff); Dade Enterprises, Inc., v. Wometco Theatres, 1935, 119 Fla. 70, 160 So. 209 (plaintiff, a moving pictures exhibitor, had spent much money on advertising for first presentation of a coming moving picture, relying on its contract with the distributor; defendant, another exhibitor, induced the distributor to allow defendant to exhibit the moving picture before plaintiff); Duval Laundry Co., v. Reif, 1937, 130 Fla. 276, 177 So. 726 (defendant employer discharged plaintiff and maliciously caused him to be blacklisted by other employers); Harvey Corp. v. Universal Equipment Co., 1947, 158 Fla. 644, 29 So.2d 700 (plaintiff tenant, forced to leave when U. S. Army requisitioned the leased premises, agreed in writing with landlord to retake possession under lease after Army left; the defendant successor Landlord refused to honor this agreement; the Supreme Court cited Chipley v. Atkinson, supra, and Dade Enterprises v. Wometco, supra, in holding defendant liable); Franklin v. Brown, Fla.App.1964, 159 So.2d 893 (plaintiff real estate broker can recover his commission from a purchaser who negotiated with broker but then bought the land directly from owner); Paul's Drugs, Inc., v. Southern Bell Telephone & Telegraph Co., Fla.App.1965, 175 So.2d 203 (plaintiff phone company obtained injunction against defendant drugstore's continuing to accept payment of its customers' phone bills after phone company terminated agreement allowing such payment; court found that the drugstore's delays and mixups with the collections interfered with the phone company's customer relations); Mays v. Stratton, Fla.App. 1966, 183 So.2d 43 (plaintiff discharged by new employer because of malicious and false information given to new employer by defendant former employer); Allen v. Reybourne, Fla.App.1966, 190 So.2d 825 (daughter recovered against stepmother for stepmother's inducing father to cut daughter out of will, even though daughter's cause of action against father's estate for breach of contract to leave daughter certain property failed).

This broad application by the Florida courts of the principles involved supports our belief that plaintiff has here set out a claim on which relief can be granted. The Florida courts have tended to apply as public policy the broad language of Dade Enterprises v. Wometco Theatres, supra:

"The weight of modern authority holds that interference with any contract amounts to a tort. * * *

"In such cases the injured party has an action against the party in default upon the contract, but he is not limited thereto. He may also maintain an action against the wrongdoer who induced such breach. * * *

"If one maliciously interferes with a contract between two persons, and induces one of them to breach the contract to the injury of the other, the injured party may maintain an action against the wrongdoer, and where the act was intentional, malice will be inferred. To do intentionally that which is calculated in the ordinary course of events to damage, and which in fact does damage, another person in his property or trade, is malicious in

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