Diplomat Electric, Inc. v. Westinghouse Electric Sup. Co.

• Citation: 430 F.2d 38
• Decision Date: 29 July 1970
• Docket Number: No. 27818.,27818.
• Parties: DIPLOMAT ELECTRIC, INC., a Florida corporation, Plaintiff-Appellee, v. WESTINGHOUSE ELECTRIC SUPPLY COMPANY, a division of Westinghouse Electric Corporation, a Pennsylvania corporation, Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

430 F.2d 38 (1970)

DIPLOMAT ELECTRIC, INC., a Florida corporation, Plaintiff-Appellee, v. WESTINGHOUSE ELECTRIC SUPPLY COMPANY, a division of Westinghouse Electric Corporation, a Pennsylvania corporation, Defendant-Appellant.

No. 27818.

United States Court of Appeals, Fifth Circuit.

July 29, 1970.

COPYRIGHT MATERIAL OMITTED

Scott, McCarty, Steel, Hector & Davis, Dwight Sullivan, Miami, Fla., for appellant.

Morris C. Tucker, Pompano Beach, Fla., Joseph A. McGowan and Alan R. Schwartz, Miami, Fla., for appellee; Horton & Schwartz, Miami, Fla., and Miller, Tucker, Roth & Prominski, Pompano Beach, Fla., of counsel.

Before PHILLIPS,^* BELL and SIMPSON, Circuit Judges.

ORIE L. PHILLIPS, Circuit Judge:

Diplomat Electric, Inc.,¹ brought this action against Westinghouse Electric Supply Company,² to recover damages for injury to Diplomat's credit and business reputation by one libel and two slanders alleged to have been committed by Paul E. Yurtinus, Credit Manager of Westinghouse at its Miami and Fort Lauderdale branches, acting as the agent of Westinghouse.

Diplomat was an electrical contracting company, with headquarters in Fort Lauderdale, Florida. It began business in 1959. It specialized in doing the electrical installations, including the furnishing of the labor and materials, on large projects, under a subcontract with the general contractor. By 1963, its annual gross sales had risen to in excess of $800,000. It was managed by its president, John P. Potter.

It was stipulated in a pre-trial stipulation by the parties that Fred Howland, Inc., was the general contractor on the Pier 66 job, a building at Fort Lauderdale, Florida; that Apgar & Markham Construction Company, Inc., was the general contractor on the Miami Springs High School job; that James Thompson, Inc., was the general contractor on the Hallandale Junior High School job; that Wesley Construction Company was the general contractor on the Florida Power & Light Executive Office Building job in Miami, Florida; that Diplomat was the electrical subcontractor on each of such jobs; and that Diplomat contracted with Westinghouse to furnish the electrical equipment, materials, and supplies for each of such jobs.

Phillips Petroleum Company was the owner of the Pier 66 Building.

It was further stipulated that at all times here material, Yurtinus was the Credit Manager of Westinghouse at both its Miami and Fort Lauderdale branches.

At all times here material, until January 14, 1965, James M. Kelley was Sales Manager of Westinghouse at its Fort Lauderdale branch. He was the sales manager through whom Diplomat dealt in contracting for the electrical equipment, materials, and supplies to carry out the subcontracts herein involved. Kelley had full authority to contract in behalf of Westinghouse with Diplomat, with respect to the electrical equipment, materials, and supplies Diplomat ordered from Westinghouse through Kelley.

In February or March 1962, Diplomat was awarded the subcontract by the general contractor, Fred Howland, Inc., to furnish and install the electrical equipment in the Federal Office Building in Miami, Florida. Westinghouse contracted with Diplomat, through Kelley, to furnish electrical equipment, materials, and supplies to perform such subcontract. Diplomat's work on that subcontract extended over two years.

In the late summer of 1964, Yurtinus asked Ross Apgar of Apgar & Markham, the general contractor on the Miami Springs High School job, under which Diplomat was the electrical subcontractor, "Why it didn't do work with some good subcontractors instead of like Diplomat." In the same conversation with Apgar, Yurtinus also said he "thought Diplomat was going broke."

On that job, Westinghouse had failed to make deliveries until long after the time fixed in the delivery schedules; and had failed to make delivery of a $10,000 piece of vital equipment, which prevented Diplomat from completing its work on such job, and Potter had declined to pay for it.

Westinghouse had failed to furnish the electrical equipment, materials, and supplies it had agreed to furnish for substantial periods after they were due to be furnished, under the delivery schedules on each of such jobs. That was particularly true of the Miami Federal Office Building job. Its failures resulted in substantial losses to Diplomat.

Because of such delays, Potter became exasperated and refused to do any further business with Westinghouse. In an attempt to placate Potter and secure for Westinghouse the contract to furnish the electrical equipment, materials, and supplies for the Pier 66 job, on which Diplomat had just started work under a subcontract, Kelley, Yurtinus, Charles Butsch, a Westinghouse factory representative, and one Meier, a branch manager of the district in which Miami and Fort Lauderdale were located, met with Potter in July of 1964. Potter had asserted a claim of $80,000 for losses Diplomat had suffered by reason of Westinghouse's delays in furnishing the electrical equipment, materials, and supplies on the Federal Office Building job, and its failure to furnish at all some of the fabricated equipment on such job. Potter told Westinghouse's representatives that he would not do any further business with Westinghouse until that claim was settled. An agreement was reached, by which Westinghouse was to credit $30,700 on the $80,000 claim on electrical equipment, materials, and supplies thereafter furnished by it to Diplomat, and was to release any claim it might have against Diplomat under the Miller Act on the Federal Office Building job, and Diplomat was to accept $30,700 in settlement of its $80,000 claim, and to enter into a contract with Westinghouse to purchase the electrical equipment, materials, and supplies for the Pier 66 job.

After the agreement related above was reached, Diplomat entered into a contract with Westinghouse for the furnishing of the electrical equipment, materials, and supplies for the Pier 66 job; and Westinghouse, by Kelley, executed and delivered to Diplomat a release of any Westinghouse claim under the Miller Act on the Federal Office Building job, which was then practically completed, in order to enable Diplomat to collect the balance due from the contractor on that job.

Notwithstanding its promise to the contrary, Westinghouse continued to be guilty of costly delays on the Pier 66 job. Kelley tried to mollify Potter, and entered into a contract to pay Diplomat liquidated damages for any delays occurring after December 31, 1964.

Notwithstanding that on December 4, 1964, Westinghouse had released its lien rights on the Miami Springs High School job to Diplomat, Yurtinus sent a letter to Apgar & Markham, to Fidelity & Deposit Company of Maryland, the surety on the general contractor's bond, and to the Dade County School Board on January 19, 1965, purporting to retain the lien and stating the amounts Diplomat owed Westinghouse on the Miami Springs High School job.

Both Potter and Kelley testified that on October 28, 1964, Diplomat gave to Westinghouse a check for $5,000, to be applied on the Pier 66 job. Kelley received the check and passed it on to Yurtinus, who forwarded it to Westinghouse. Westinghouse credited the check on the Federal Office Building job. Yurtinus claimed the $5,000 check was paid on the Federal Office Building job, and apparently unknown to Kelley, in November 1964, Yurtinus ordered the fabrication of materials for Diplomat on the Pier 66 job stopped. On January 5, 1965, Yurtinus wrote a letter to Diplomat, sent copies to the owner, to J. M. Lloyd, the project manager, and to Fred Howland, Inc., the general contractor on the Pier 66 job, stating that Diplomat had been delinquent in the amount of $4,985.23, due to Westinghouse on such job since the previous August; that Diplomat had failed to keep several of its commitments, and that Westinghouse had advised Diplomat by telephone and letters on September 10, 1964, October 2, 1964, and November 17, 1964, that Westinghouse had stopped fabrication and would not make any further deliveries until such balance of $4,985.23 had been paid.

The libel claim was predicated on the statement of Yurtinus to the owner, the project manager, and the general contractor on the Pier 66 job that Diplomat had been delinquent in the amount of $4,985.23 since August 1964.

Yurtinus had failed to check the purchase order or to confer with Kelley before sending that letter. Kelley, at Potter's request, sent the general contractor a telegram, stating the letter was erroneous. In response to an inquiry by the general contractor as to whether such telegram refuted or rescinded the letter of January 5, 1965, Yurtinus, without checking with Kelley, replied that it did not.

Also in January 1965, without having examined the purchase order on the Florida Power & Light Company Office Building job, which purchase order set forth the terms of payment, Yurtinus told a representative of the Florida Power & Light Company that there was $102,000 past due from Diplomat to Westinghouse on that job. Under the purchase order, payment was due "EOM plus 60 days." Yurtinus testified that the terms were "2 percent at the end of the month, if I remember, plus 60 more days." Hence, shipments made in a particular month were not due for payment until the end of such month, plus 60 days. Therefore, payment for shipments made in November and December, 1964, was not due until February 1, 1965, or thereafter. Yurtinus tried to justify his statement by saying "bills are usually paid on the 10th of the month," but finally admitted that the $102,000 was not due when he made the statement that it was past due, and that his statement was false. One of the slander claims was based on the statement that $102,000 was past due on the Florida Power & Light Company job.

In July 1964, Yurtinus told James Thompson, the general contractor on the Hallandale Junior High School job, the amount due and unpaid on that job from...