Edwards Transports, Inc. v. Circle S Transports, Inc.

• Citation: 856 S.W.2d 783
• Decision Date: 25 May 1993
• Docket Number: No. 07-92-0327-CV,07-92-0327-CV
• Parties: EDWARDS TRANSPORTS, INC. and Tom Nations, Appellants, v. CIRCLE S TRANSPORTS, INC., Appellee.
• Court: Court of Appeals of Texas

Page 783

856 S.W.2d 783

EDWARDS TRANSPORTS, INC. and Tom Nations, Appellants, v. CIRCLE S TRANSPORTS, INC., Appellee.

No. 07-92-0327-CV.

Court of Appeals of Texas,

Amarillo.

May 25, 1993.

Opinion Overruling Motion for Rehearing July 7, 1993.

McCleskey, Harriger, Brazill & Graf, LLP, Jim Hund, Lubbock, for appellants.

Carr, Fouts, Hunt, Craig, Terrill & Wolfe, LLP, Donald M. Hunt, Gary Bellair, Lubbock, for appellee.

Before REYNOLDS, C.J., and BOYD and POFF, JJ.

POFF, Justice.

Edwards Transport, Inc. and Tom Nations, appellants, appeal from a judgment in favor of Circle S Transport, hereinafter Circle S. The judgment arose from a suit against Edwards and Nations claiming tortious interference with Circle S's business relationship with Amoco Production Company.

In six points of error, Edwards and Nations contend that the court erred in its charge to the jury, in not rendering judgment n.o.v., and in failing to grant a new trial. We will overrule the points of error and affirm the judgment.

For sometime prior to 1989 both Circle S and Edwards had a business relationship with Amoco. Both Circle S and Edwards hauled salt water and other fluids from Amoco's oil and gas wells in and around Hockley County. While neither Circle S nor Edwards had a signed contract with Amoco, they were both on Amoco's "approved list" of vendors who were to be contacted when fluid hauling was needed. A Mr. Rumbaugh was Amoco's superintendent in Hockley County.

Beginning in September 1989, Slape, one of Circle S's owners, perceived that Edwards was receiving a disproportionate share of Amoco work. Slape conveyed this to Rumbaugh, and in an effort to garner more work, he presented to Rumbaugh a reduced rate schedule. Slape also met with Mr. Nations, the owner of Edwards, Inc., to share with him Circle S's new rate schedule. Slape was surprised to learn that Nations already knew about Circle S's new rates. Nations concluded Slape read something sinister into his friendship with Rumbaugh. This idea was fueled by Nation's comment that he was aware of Circle S's rate increases. The Slape-Nations meeting by all parties' accounts became quite heated. There is great controversy, however, as to what was said at the meeting.

Nations maintained that Slape accused him and Rumbaugh of having a crooked relationship. Slape also allegedly said he was going to get to the bottom of the deal. Nations also contended Slape offered to sell Circle S to Edwards.

Slape denied accusing Nations and Rumbaugh of illegal or improper activity. He did state he would like to know how Edwards knew so much about his and Amoco's dealings. Slape did recall a discussion of his selling out; but, he stated that Nations offered to buy him out. Needless to say, everyone agreed the Slape-Nations meeting ended on a sour note.

After Slape left his office, Nations called Rumbaugh and informed him of his meeting with Slape. Nations told Rumbaugh that Slape had accused him of illegal or improper dealings with Edwards. Nations also told Rumbaugh that Slape was spreading the word of the improper relationship and had threatened to make trouble. As one might expect, Rumbaugh was irritated. Rumbaugh called Slape and asked him to drop by his office the next day. The Slape-Rumbaugh meeting was not fruitful.

Rumbaugh testified that Slape first denied accusing Rumbaugh of improprieties and called Nations a liar. Rumbaugh testified that Slape later admitted he had made accusations that wrongdoing existed between Rumbaugh and Nations. Rumbaugh and Slape had three or four subsequent meetings without resolving the conflict. Rumbaugh testified Slape threatened to go over Rumbaugh's head and make it hard on him. Word of problems between Rumbaugh and Slape spread to other Amoco employees. One such employee testified that he had heard Slape admit he had messed up big time. An investigation was made by Rumbaugh's superiors and no wrongdoing was proven. As a result of the bad feelings, Circle S received very little business from Amoco.

Slape testified he had in fact had three or four meetings with Rumbaugh subsequent to his meeting with Nations. He denied ever admitting to Rumbaugh that he had accused Rumbaugh and Nations of an improper relationship. Slape consistently denied telling Nations or anyone else that Nations and Rumbaugh had an improper relationship. Slape also denied admitting he had messed up big. He did admit talking to Rumbaugh's supervisor; but, he denied threatening Rumbaugh. Slape testified that his work for Amoco ceased as a result of the hostility created by Nations falsely accusing him of alleging Nations and Rumbaugh had an improper relationship. The trial of the case ultimately degenerated into a swearing match between Slape, Nations, and Rumbaugh, regarding whether or not Slape had made accusations against Nations and Rumbaugh.

Prior to the trial on the merits, the trial judge issued a pre-trial order instructing the parties to prepare proposed jury charges and instructions. Pursuant to the order, Edwards tendered its question, instruction, and definition dealing with its At the charge conference, a discussion arose concerning the burden of proof on the question of justification or excuse. Edwards contended Circle S had the burden to disprove the truthfulness of Nations' statements that Slape accused Nations and Rumbaugh of having an improper relationship. Circle S argued and the court concluded that the truthfulness of Nations' statement was an affirmative defense and that Edwards had the burden of proof on its affirmative defense. The court, however, declined to submit the affirmative defense separately. The court instead modified Edwards' requested question and combined it with the charge prepared by Circle S. The affirmative defense was thus placed in the instruction accompanying Circle S's first question.

affirmative defense of justification or excuse. Circle S also presented its proposed questions, instructions and definitions. During trial, it became clear the pivotal question in the case was not whether Nations' conversation with Rumbaugh interfered with Circle S's business relationship with Amoco, but rather whether the interference was justified. All parties agreed the interference was justified if Nations truthfully communicated to Rumbaugh Slape's statements.

In Edwards' first two points of error, it complains of the court's charge to the jury. In point of error one, Edwards contends the court improperly placed upon it the burden of proving that the alleged interference was not wrongful but rather was justified. The instruction in issue was given in connection with question No. 1 which reads as follows:

Do you find that either Edwards Transports, Inc., or Tom Nations interfered with the business relationship of the Plaintiff and AMOCO PRODUCTION COMPANY?

You are instructed in connection with Question No. 1 that in order to answer "Yes" to either subdivision, you must be satisfied that Tom Nations, either individually or as President of Edwards Transports, Inc., wrongfully interfered with the business relationship between Circle S Transports, Inc., and Amoco Production Company, that said party acted willfully and intentionally, that there was a reasonable probability that Circle S Transports, Inc., would continue to do business with Amoco Production Company, except for such interference, and that such interference prevented Circle S Transports, Inc., from entering into business relationships with Amoco Production Company into which it would have otherwise have entered.

You are further instructed that for the interference to be "wrongful" it must not have been justified or privileged. Such interference would be justified or privileged:

(1) if it is done in a bona fide exercise of that party's own rights; or,

(2) if that party has an equal or superior right in the subject matter to that of the other party.

The Defendants have the burden of proving that the interference, if any, was justified or privileged. (Tr. 24).

Edwards' complaints, as must be all complaints pertaining to a charge, are viewed in light of the record as a whole. The standard of review is abuse of discretion. Mobil Chem. Co. v. Bell, 517 S.W.2d 245 (Tex.1974).

By so framing the question and placing on Edwards the burden of proof on the issue of justification or excuse, the trial judge adopted the rationale of Sterner v. Marathon Oil Co., 767 S.W.2d 686, 690 (Tex.1989). In Sterner, the Supreme Court re-addressed the question of whether the lack of justification or excuse in an interference with contract case is an element of the plaintiff's cause of action or whether justification or excuse is an affirmative defense. Consistent with many jurisdictions, the Court ruled that the claim of excuse or justification is an affirmative defense because the defendant has not denied the interference but rather seeks to avoid liability. Such defenses are affirmative in nature under Tex.R.Civ.Proc. 94, because they constitute a confession and avoidance. The decision in Sterner has been reaffirmed in Southwestern Bell Tele. Co. v. John As noted by Edwards in its brief, the court's application of the Sterner doctrine to a noncontractual interference with business relationship case is an extension of Sterner. Edwards notes that post Sterner decisions by the Houston [14th Dist.], Dallas, Corpus Christi and Beaumont Courts of Appeals have failed to extend the Sterner holding to tortious interferences with prospective business relations. American Medical Int'l., Inc. v. Giurintano, 821 S.W.2d 331 (Tex.App.--Houston [14th Dist.] 1991, no writ); Gillum v. Republic Health Corp., 778 S.W.2d 558 (Tex.App.--Dallas 1989, no writ); Exxon Corp. v. Allsup, 808 S.W.2d 648 (Tex.App.--Corpus Christi 1991, writ denied); Barker v. Brown, 772 S.W.2d 507 (Tex.App.--Beaumont 1989, no writ). In each case, the courts continued to cite malice as an element in a plaintiff's petition alleging interference in a...