COLLINS ENTERTAINMENT v. Coats
| Decision Date | 03 February 2003 |
| Docket Number | No. 3596.,3596. |
| Court | South Carolina Court of Appeals |
| Parties | COLLINS ENTERTAINMENT CORP., Respondent, v. COATS AND COATS RENTAL AMUSEMENT, d/b/a Ponderosa Bingo and Shipwatch Bingo, Wayne Coats, individually, and American Bingo & Gaming Corp., Defendants, Of whom American Bingo & Gaming Corp. is, Appellant. |
Timothy G. Quinn, of Columbia, for Appellant.
Stephen L. Brown, Edward D. Buckley, Jr., Donald J. Davis, Jr. and Stephen P. Groves, Sr., all of Charleston, for Respondent.
Collins Entertainment Corp. (Collins) brought this action against (1) Coats and Coats Rental Amusement, d/b/a Ponderosa Bingo and Shipwatch Bingo, (2) Wayne Coats, individually, and (3) American Bingo & Gaming Corp. (ABG), alleging various causes of action arising out of ABG's removal of Collins' coin machines from Ponderosa Bingo and Shipwatch Bingo. The case was referred to the Charleston County master-in-equity for trial with authority to enter a final judgment. ABG appeals (1) the master's finding that it intentionally interfered in a lease for the placement of Collins' video poker machines in the two business establishments and (2) the punitive damages award. We affirm.
T.A. Coats and his wife Darlene owned or operated a business known as Coats and Coats Rental Amusement. Wayne Coats, their son, also appears to have been involved in the business. Coats and Coats Rental Amusement operated two bingo halls, Ponderosa Bingo and Shipwatch Bingo, at two different locations. The locations had been procured by T.A. Coats subject to written real estate leases between him and the individual property owners.
On March 28, 1996, Collins entered into a six-year lease agreement with "Coats and Coats Rental Amusements d/b/a Ponderosa Bingo and Shipwatch Bingo and Wayne Coats, individually" for the exclusive right to lease video poker machines at both locations. The parties were to split the revenues from operating the machines. The agreement further provided that, if the premises were sold, the buyer was to assume the lease. Wayne Coats signed the agreement individually and on behalf of Coats and Coats Rental Amusement.
In 1997, ABG entered into negotiations with T.A. Coats to purchase the assets of the Ponderosa and Shipwatch businesses and to assume the ground leases to the properties on which they operated. The purchase and sale agreement required Coats and Coats to indemnify ABG in the event ABG was sued for interfering with the video poker machine contract. Although T.A. Coats made ABG aware of the agreement with Collins, ABG did not assume the lease and instead removed Collins' machines from the premises.
Collins then brought this action against Coats and Coats, Wayne Coats, and ABG. In its complaint, Collins asserted a claim for breach of contract against Coats and Coats and Wayne Coats. Collins further asserted causes of action for intentional interference with a contract, civil conspiracy, and unfair trade practices against ABG.
At trial, the master dismissed the civil conspiracy cause of action and found in favor of ABG on the unfair trade practices claim. The master, however, determined ABG was liable for intentional interference with Collins' contract and awarded actual damages of $157,449.66 and punitive damages of $1,569,013.00.1 The master denied ABG's post-trial motions.
ABG first contends the master erred in denying its motion to amend its answer to conform to the evidence presented at trial. We find no error.
In its answer, ABG stated: "This Defendant admits purchasing the businesses known as Ponderosa Bingo and Shipwatch Bingo from Coats & Coats Rental Agreement and Wayne Coats individually." Before calling any witnesses, Collins' attorney read this statement into the record verbatim without objection from ABG. At trial, however, Wayne Coats testified that he had no ownership interest in either business when ABG acquired them.
After the close of ABG's case, Collins' attorney again read the answer into the record. This time, however, ABG moved to amend the answer to conform to the proof. In support of the motion, counsel for ABG claimed: 2 Collins objected to the motion, alleging the entire litigation was based on the admission in ABG's answer. The master denied the motion to amend.
Citing Rule 15(b) of the South Carolina Rules of Civil Procedure, ABG argues the master should have permitted it to amend its answer to conform to the proof offered.3 We agree, however, with Collins that Rule 15(b) is inapplicable to this situation. As this court stated in Sunvillas Homeowners Ass'n v. Square D Co.:
The rule covers two situations. First, if an issue not raised by the pleadings is tried by express or implied consent of the parties the court may permit amendment of the pleadings to reflect the issue. Second, if a party objects to the introduction of evidence as not being within the pleadings the court may permit amendment of the pleadings subject to a right to grant a continuance if necessary.4
Here, the issue prompting ABG's motion to amend was raised in the complaint and admitted by ABG; therefore, the first situation did not apply. Moreover, because no objection was made as to any evidence being outside the pleadings, the master could not have permitted an amendment pursuant to the second part of the rule.
ABG asserts Collins failed to prove the elements of intentional interference with contractual relations. In our view, however, the record has sufficient evidence to support a finding that Collins proved each of the necessary elements.
"The elements of a cause of action for tortious interference with contract are: (1) existence of a valid contract; (2) the wrongdoer's knowledge thereof; (3) his intentional procurement of its breach; (4) the absence of justification; and (5) resulting damages."5
At trial, ABG contended (1) the parties to the contracts for placement of the video poker machines at Ponderosa Bingo and Shipwatch Bingo were Collins, Wayne Coats, and an entity called Coats and Coats Rental Amusement owned by Wayne Coats; (2) the entity known as Coats and Coats Rental Amusement that was owned by Wayne Coats was a North Carolina entity and separate and distinct from the Coats and Coats owned by T.A. and Darlene Coats; and (3) T.A. Coats held the ground lease on the properties where the businesses were located. ABG maintained that, because it negotiated with only T.A. Coats for the ground leases, it could not have interfered with the video poker machine agreement giving Collins the exclusive right to place its machines at Ponderosa Bingo and Shipwatch Bingo, as that agreement did not involve T.A. Coats.
The master, however, found that Coats and Coats was a business "consisting of Wayne Coats' mother and father, T.A. Coats, Wayne Coats, and Darlene Coats" and that "T.A. Coats, Darlene Coats, and Wayne Coats operated various aspects of the Ponderosa and Shipwatch businesses under various trade names including Coats and Coats, Coats and Coats Rental Amusements, and Darlene's Rental and Amusements, all of which were run and controlled by T.A. Coats." The master then determined that the "contract between Collins and Coats and Coats was negotiated by T.A. Coats and signed by Wayne Coats at his direction and under the authority of T.A. Coats." Finally, the master concluded that "T.A. Coats ratified this contract by his actions subsequent to the placement of Collins Machines at the Shipwatch and Ponderosa locations."
In his deposition, T.A. Coats testified he negotiated the contracts for the video poker machines to be placed in the Ponderosa and Shipwatch locations.6 He further explained that, because he was out of town when Collins' representative brought the machines, he instructed Wayne Coats to sign the contracts so the machines could be left on the premises. Finally, T.A. Coats testified that the Coats and Coats entity that was a party to the Collins agreement was his business and, furthermore, that the Coats and Coats entity that Wayne Coats established was not in existence at that time.7 Based on the foregoing, we hold the record contains evidence to support the master's determination that Collins' contract was with T .A. Coats and not with Wayne Coats. Although Wayne Coats may have signed the agreement, the record supports the finding that he did this only with express authorization from T.A. Coats to act on behalf of T.A. Coats and Coats and Coats Rental Amusement.8
ABG next contends it had no knowledge of any contract between Collins and T.A. Coats and was told that Wayne had the video poker lease. The record, however, supports the finding that ABG knew that T.A. Coats was a party to the contract at issue.
T.A. Coats testified that he told Greg Wilson, Roy Stevens, Richard Henry, and Barry Goldstein, all of ABG, that he had a contract with Collins for the video poker machines. In addition, ten of Collins' video poker machines were present in each location and, as required by state law, were clearly marked as belonging to Collins. T.A. Coats further stated he told individuals at ABG that he was not going to breach the agreement and that ABG had to remove Collins' machines and contact Collins. Roy Stevens, ABG's state manager, testified he knew of the video poker lease with Collins and ABG had a copy of the contract to review. Barry Goldstein testified that a copy of the Collins lease was passed around ABG "like the Sunday comic strip."
ABG further asserts there was no evidence presented at trial that it either induced or coerced T.A. Coats or Wayne Coats into breaching the video poker lease. We disagree. According to ...
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