Commercial Business Systems, Inc. v. Halifax Corp.

• Decision Date: 18 April 1997
• Docket Number: No. 960754,960754
• Citation: 484 S.E.2d 892,253 Va. 292
• Parties: COMMERCIAL BUSINESS SYSTEMS, INC. v. HALIFAX CORPORATION, et al. Record
• Court: Virginia Supreme Court

Page 892

484 S.E.2d 892

253 Va. 292

COMMERCIAL BUSINESS SYSTEMS, INC. v. HALIFAX CORPORATION, et al.

Record No. 960754.

Supreme Court of Virginia.

April 18, 1997.

H. Kenneth Kudon, Washington, DC (Richard L. Locke, Dana J. Finberg, Mezzullo & McCandlish, Richmond, VA, on briefs), for appellant.

Wyatt B. Durrette, Jr. (Barrett E. Pope; Durrette, Irvin & Bradshaw, on brief), Richmond, VA, for appellees.

Present: All the Justices.

COMPTON, Justice.

This is the final chapter in litigation that has continued most of this decade. The moving party in the controversy is a disgruntled player in the rough-and-tumble world comprising the competitive marketplace.

The main players in this dispute are: Commercial Business Systems, Inc. (CBS), a business located in Chesterfield County that engaged in the repair, maintenance, and refurbishing of computer and data processing equipment; BellSouth Services, Incorporated, a business located in Birmingham, Alabama, that was created to perform selected staff and planning functions for Southern Bell and South Central Bell Telephone Companies and to consolidate services that can be managed most effectively through a central organization; Halifax Corporation, formerly Halifax Engineering, Inc., a Virginia corporation located in Alexandria that engaged in business similar to that of CBS; and Jerry H. Waldrop, an Alabama resident who had been employed by BellSouth in its Birmingham office as a contract officer responsible for negotiating contracts with vendors and selecting vendors to repair telephone and computer equipment for BellSouth.

In 1990, CBS filed a motion for judgment against BellSouth seeking recovery of lost profits and punitive damages for alleged statutory conspiracy to injure CBS in its trade or business, in violation of Code § 18.2-499; common law conspiracy to injure CBS's business; and tort liability imputed to BellSouth under the doctrine of respondeat superior as a result of the activities of Waldrop. CBS claimed that Waldrop awarded a contract to CBS's competitor, Halifax, in exchange for commercial bribes.

Following discovery, the trial court granted BellSouth's motion for summary judgment and denied CBS's motion for partial summary judgment. CBS contended that, as a matter of law, Waldrop acted within the scope of his employment with BellSouth when he engaged in improper conduct.

On appeal, this Court reversed the trial court's judgment and remanded the case for further proceedings. Commercial Business Systems v. BellSouth Services, Inc., 249 Va. 39, 453 S.E.2d 261 (1995). The record in that appeal was comprised of the pleadings, including memoranda and exhibits accompanying the summary judgment motions, "selected" responses to requests for admission, and "excerpts" from deposition testimony of a number of witnesses.

In that appeal (hereinafter, the BellSouth case), we held that a jury issue was presented on the question whether Waldrop acted within the scope of his employment when he committed the wrongful acts, and thus the trial court erred in granting summary judgment in favor of BellSouth on CBS's tort liability claim. Id. at 46, 453 S.E.2d at 266. We also held that the trial court erred in granting summary judgment on CBS's claims of statutory conspiracy, common law conspiracy, and damages.

Upon remand, the BellSouth case was consolidated with another action that had been filed by CBS. Prior to the BellSouth appeal and after the trial court had ruled on the summary judgment motions in favor of BellSouth, CBS nonsuited other defendants in that case. Then, CBS refiled an action against some of the parties who had been defendants at the pleading stage of the BellSouth case. After the cases were joined upon remand, CBS filed a consolidated motion for judgment against defendants BellSouth, Halifax, Waldrop, and Clifford J. McGuire, who had been Halifax's southeastern regional manager.

The consolidated cases were tried to a jury during eight days in October 1995. The issues submitted to the jury were CBS's claims against all defendants of statutory conspiracy, common law conspiracy, and conspiracy to tortiously interfere with a prospective business relationship. Also submitted was CBS's claim against Halifax and McGuire of wrongful interference with a prospective business relationship.

The jury found in favor of all defendants on the statutory and common law conspiracy claims. The jury found in favor of BellSouth and Halifax, and against Waldrop and McGuire, on the claim of conspiracy to tortiously interfere with a prospective business relationship. The jury found against Halifax and McGuire on the claim of wrongful interference with a prospective business relationship. The jury awarded CBS compensatory damages of $435,177 plus prejudgment interest.

Subsequently, the trial court entered judgment on the verdict in favor of BellSouth. Later, the court set aside the verdict against Halifax, McGuire, and Waldrop and entered judgment in their favor, from which CBS appeals. The judgment in favor of BellSouth has become final. Waldrop, who appeared pro se throughout the proceedings, has not appeared on appeal.

The dispositive issue on appeal is whether CBS presented evidence sufficient to raise a jury question on its claim that Halifax and/or McGuire (hereinafter, Halifax) wrongfully interfered with CBS's prospective business relationship with BellSouth in connection with a contract that CBS had with BellSouth that expired July 28, 1987.

When the verdict of a jury has been set aside by the trial court, the verdict is not entitled to the same weight upon appellate review as one that has received the trial court's approval. But in considering the facts under these circumstances, the appellate court will accord the plaintiff benefit of all substantial conflicts in the evidence and all reasonable inferences that may be drawn from the evidence. Kelly v. Virginia Elec. and Power Co., 238 Va. 32, 34, 381 S.E.2d 219, 220 (1989).

Before we summarize the evidence, we shall dispose of a contention made by CBS that somehow Halifax is bound in the present appeal by factual conclusions stated by this Court in the former appeal in the BellSouth case to which Halifax was not a party. At various times on brief and during oral argument of the appeal, CBS has packaged this contention in terms of "controlling precedent" or "stare decisis" or "persuasive," although not "the law of the case" or "res judicata." Whatever may be the actual basis of this contention, we reject it.

Of course, under the doctrine of stare decisis, the principles of law as applicable to the state of facts in the BellSouth case will be adhered to, and will apply in later cases where the facts are substantially the same, even though the parties are different. See Selected Risks Ins. Co. v. Dean, 233 Va. 260, 265, 355 S.E.2d 579, 581 (1987). But adherence to that principle relating to conclusions of law does not mean that conclusions of fact based on a summary judgment record have any binding effect whatsoever, in the context of appellate review, upon factual findings arising from a jury trial where the parties in the two cases are different and where, unlike the summary judgment proceeding, the facts were fully developed.

Indeed, a reason underlying our Rule 3:18, providing that summary judgment "shall not be entered if any material fact is genuinely in dispute," is to assure that parties' rights are determined upon a full development of the facts, not just upon pleadings and "selected" "excerpts" from discovery materials. Thus, it would be illogical to hold, in this context, that appellate conclusions of fact in a summary judgment appeal have any controlling effect upon facts later developed in the case during a jury trial. See Carper v. Norfolk & W.R. Co., 95 Va. 43, 45, 27 S.E. 813, 813 (1897) (upon remand for trial de novo, new decision required upon second appellate review if facts change).

The material facts presented during the jury trial essentially are undisputed. CBS was founded by Gary Ewell Lacey as a sole proprietorship "around 1981" to repair, refurbish, and sell telecommunications equipment. Incorporated in 1984, CBS "would approach companies," including telephone companies, "and see if they needed communications equipment either purchased or refurbished or repaired." Lacey contacted BellSouth seeking to obtain a contract for the repair of Digital Equipment Corporation (DEC) "writer printers" known as "TP1000s," which were manufactured for and extensively used by telephone companies.

Lacey dealt with William B. Jordan, a BellSouth employee whose duties involved writing "contracts for the repair of movable telecommunications equipment." Jordan also was responsible for "contract administration," that is, his "job was to assure that the contract was being met by both the vendor and the company."

In 1985, CBS submitted a bid of $691,060 and was awarded Contract No. 85073 for "The Repair/Refurbishment and Conversion of TP1000 Teleprinters" for "the two year period July 29, 1985 thru July 28, 1987." The contract did not "grant [CBS] an exclusive privilege to repair all products of the type described" and provided that BellSouth "may contract with others for the repair of comparable products and services." The contract also provided for termination by either party upon 60 days notice "without any charge or liability whatsoever."

CBS commenced performing under the contract and "had an excellent working relationship" with Jordan, who solely administered the contract. In November 1986, because the "contract was coming up for renewal," Lacey contacted Jordan and advised him that CBS "would like to start the process to renew the contract with BellSouth." According to Lacey, when Jordan was asked "what he thought [CBS's] chances of renewal were," Jordan responded, "that's not going to be a problem ... you guys are one of the best vendors that we have.... You're doing your work,...