C.W. Development, Inc. v. Structures, Inc. of West Virginia

• Decision Date: 11 July 1991
• Docket Number: No. 19764,19764
• Citation: 408 S.E.2d 41,185 W.Va. 462
• Court: West Virginia Supreme Court
• Parties: C.W. DEVELOPMENT, INC., Plaintiff Below, Appellee, v. STRUCTURES, INC. OF WEST VIRGINIA, Defendant Below, Appellant.

Page 41

408 S.E.2d 41

185 W.Va. 462

C.W. DEVELOPMENT, INC., Plaintiff Below, Appellee, v. STRUCTURES, INC. OF WEST VIRGINIA, Defendant Below, Appellant.

No. 19764.

Supreme Court of Appeals of West Virginia.

Submitted May 15, 1991.

Decided July 11, 1991.

Syllabus by the Court

1. "To establish prima facie proof of tortious interference, a plaintiff must show:

(1) existence of a contractual or business relationship or expectancy;

(2) an intentional act of interference by a party outside that relationship or expectancy;

(3) proof that the interference caused the harm sustained; and

(4) damages.

If a plaintiff makes a prima facie case, a defendant may prove justification or privilege, affirmative defenses. Defendants are not liable for interference that is negligent rather than intentional, or if they show defenses of legitimate competition between plaintiff and themselves, their financial interest in the induced party's business, their responsibility for another's welfare, their intention to influence another's business policies in which they have an interest, their giving of honest, truthful requested advice, or other factors that show the interference was proper." Syllabus Point 2, Torbett v. Wheeling Dollar Sav. & Trust Co., 173 W.Va. 210, 314 S.E.2d 166 (1983).

2. " 'Punitive or exemplary damages are such as, in a proper case, a jury may allow against the defendant by way of punishment for wilfulness, wantonness, malice, or other like aggravation of his wrong to the plaintiff, over and above full compensation for all injuries directly or indirectly resulting from such wrong.' Syllabus Point 1, O'Brien v. Snodgrass, 123 W.Va. 483, 16 S.E.2d 621 (1941)." Syllabus Point 4, Harless v. First National Bank in Fairmont, 169 W.Va. 673, 289 S.E.2d 692 (1982).

James W. St. Clair, St. Clair & Levine, Huntington, for appellee.

Edward M. Kowal, Jr., Frank H. Fitch, III, Campbell, Woods, Bagley, Emerson, McNeer & Herndon, Huntington, for appellant.

PER CURIAM:

Structures, Inc. of West Virginia and C.W. Development, Inc. entered into a contract whereby C.W. was to perform certain concrete and framing work on the Pine Woods Apartment project at Short Gap, Mineral County, West Virginia. While C.W. was performing the contract and without notice to C.W., Structures hired C.W.'s project superintendent, Harold Witt, to install utility lines. Thereafter, C.W. stopped work, fired Mr. Witt and sued Structures for both compensatory and punitive damages alleging an intentional interference with the employment relationship between C.W. and Mr. Witt. After the jury awarded C.W. $24,154.30 in compensatory damages and $75,000 in punitive damages, Structures appealed to this Court alleging that C.W. failed to show an intentional interference and that punitive damages should not have been awarded. Because the evidence in the record justifies the jury's determination that Structures intentionally interfered with the employment relationship between C.W. and its project superintendent, we affirm the decision of the Circuit Court of Cabell County.

On October 21, 1987, Structures and C.W. entered a contract whereby C.W. agreed to perform certain concrete work at the Pine Woods Apartment project in return for the payment of $66,484. The contract was signed for C.W. by Mr. Witt and C.W. began work in November 1987. In December 1987, Structures and C.W. agreed that C.W. would install certain framing for an additional payment of $10,489.. The framing work was documented by change order number one, dated December 29, 1987, signed for C.W. by Carole Dawson, President of C.W. The record also contains a second change order, dated February 1, 1988, indicating that C.W. would provide a backhoe for moving brick and digging rock for $860 and would perform additional concrete work for $515, for a total additional payment of $1,375. The second change order, although signed by Structures, was never signed by C.W.

Before C.W. could complete all the concrete sidewalks, certain underground utility lines had to be completed. After Structures rejected all bids to install the utility lines (C.W. bid about $20,000), Structures purchased some material and attempted to contract for labor only. In December 1987, Structures asked Mr. Witt if he and the C.W. crew would install the utility lines by working after hours. Although Mr. Witt was a full-time salaried employee of C.W., he agreed to use C.W.'s crew to install the utility lines. Structures paid Mr. Witt $1,300 on December 11, 1987 and $3,000 on January 22, 1988. In order to install the utility lines, Mr. Witt used a backhoe that had been rented by C.W. and stone that had been paid for by C.W. The stone was valued at $855 and the second change order indicates that the rental cost of the backhoe to install the utility lines was $860.

Although the parties dispute how C.W. learned of Mr. Witt's installation of the utility lines, both agree that Structures never informed C.W. in advance of Mr. Witt's additional work. ¹ In January 1988 after learning of Mr. Witt's additional work, C.W. fired Mr. Witt, and stopped work on the project. At the time C.W. stopped work, C.W. estimated that the original contract for concrete was 95% completed, and that the first change order for framing was 90% completed. Structures paid C.W. $54,975.60 on the contract. After C.W. left the project, Structures hired Mr. Witt to complete the contract and paid him about $11,500.

Mr. Witt and the C.W. crew were supposed to install the utility lines after regular hours. Mr. Witt testified that the C.W. crew worked on the utility lines at least one weekend. However, C.W. maintained that given the amount of work necessary to install the utility lines, there was not enough daylight in December and January to complete the work outside the normal working hours.

C.W. sued Structures for compensatory damages based on the unpaid portion of the work C.W. completed and punitive damages based on an alleged tortious interference with an employment relationship. ² The jury awarded C.W. $24,154.30 in compensatory damages and $75,000 in punitive damages. After the circuit court denied Structures' motion for a new trial or a remittitur, Structures appealed to this Court alleging the following assignments of error: (1) C.W. failed to prove that Structures intentionally interfered with an employment relationship without justification or excuse; (2) punitive damages were not justified; (3) the jury was given inconsistent instructions on the standard of proof; and (4) the circuit court failed to declare a mistrial because of improper and inflammatory remarks made during his closing argument of C.W.'s counsel.

I

West Virginia's two leading cases on intentional interference with an employment relationship are Torbett v. Wheeling Dollar Sav. & Trust Co., 173 W.Va. 210, 314 S.E.2d 166 (1983) and Thacker Coal & Coke Co. v. Burke, 59 W.Va. 253, 53 S.E. 161 (1906). See Bryan v. Massachusetts Mut. Life Ins. Co., 178 W.Va. 773, 364 S.E.2d 786 (1987) (holding no tortious interference existed because defendants had both a financial and business interest); W. Prosser and W. Keeton, The Law of Torts, § 129 at 995-96 (5th ed. 1984). Although Torbett concerned a covenant not to compete, we discussed the requirements of a prima facie case of tortious interference in an employment relationship and the factors that might show the interference was proper.

To establish prima facie proof of tortious interference, a plaintiff must show:

(1) existence of a contractual or business relationship or expectancy;

(2) an intentional act of interference by a party outside that relationship or expectancy;

(3) proof that the interference caused the harm sustained; and

(4) damages.

If a plaintiff makes a prima facie case, a defendant may prove justification or privilege, affirmative defenses. Defendants are not liable for interference that is negligent rather than intentional, or if they show defenses of legitimate competition between plaintiff and themselves, their financial interest in the induced party's business, their responsibility for another's welfare, their intention to influence another's business policies in which they have an interest, their giving of honest, truthful requested advice, or other factors that show the interference was proper.

Syllabus Point 2, Torbett supra.

Our earlier case of Thacker concerned "damage for enticing servants from the plaintiff's service...." Id. 59 W.Va. at 254, 53 S.E. at 162. Thacker, in Syllabus Point 2, held at "[i]f one wantonly and maliciously, whether for his own benefit or not, induces a person to violate his contract with a third person to the injury of that third person, it is actionable."

On appeal, Structures maintains that there was no intentional interference. According to Structures, Mr. Witt said that it was fine with C.W. if he performed the additional work and Structures asked Mr. Witt about the progress of the additional work in the presence of Mrs. Dawson, C.W.'s president. Structures also maintains that Mr. Witt was approached in order to keep the job, including C.W.'s concrete work, from being delayed.

However, C.W. maintains that they were never informed of the use of their crew, their stone or even the backhoe they rented. C.W. claims that Mr. Witt's additional work was never discussed with them or in their presence. C.W. alleges that they became aware of the problem because the contract was exceeding the budgeted time. C.W. also presented evidence that the usual practice in construction was to seek an employer's permission before approaching an employee concerning additional or side work by an employee. ³

In Torbett, we noted that the propriety of the interference was determined by examining the factual situation and we looked to the factors listed in the Restatement (Second) of Torts, § 767 [1977]. Torbett, supra 173 W.Va. at 215 n. 12, 314 S.E.2d at 172 n. 12. One of the factors listed in the...