Egidio DiPardo & Sons, Inc. v. Lauzon

• Decision Date: 23 February 1998
• Docket Number: No. 96-588-A,96-588-A
• Citation: 708 A.2d 165
• Court: Rhode Island Supreme Court
• Parties: EGIDIO DiPARDO & SONS, INC., et al. v. Marc C. LAUZON, et al. ppeal.

Page 165

708 A.2d 165

EGIDIO DiPARDO & SONS, INC., et al. v. Marc C. LAUZON, et al.

No. 96-588-Appeal.

Supreme Court of Rhode Island.

Feb. 23, 1998.

Melody A. Alger, Providence, Dennis S. Boluch, for Plaintiffs.

Joseph F. Dugan, Joel D. Landry, Providence, for Defendants.

Before WEISBERGER, C.J., and LEDERBERG, BOURCIER, FLANDERS and GOLDBERG, JJ.

OPINION

FLANDERS, Justice.

A macabre mother-son feud over the remains of a family's multi-generational burial business muddied the funeral plot in this case. The plaintiff, Elaine DiPardo (Elaine), was the widowed matriarch of the plaintiff, Egidio DiPardo & Sons, Inc. (DiPardo & Sons), a venerable Woonsocket mortuary. James P. DiPardo (James), her now-deceased son, was the funeral home's business manager and heir apparent. A vaunted embalmer and much-heralded funeral-home director, James decided in 1993 to join forces with another Woonsocket funeral merchant. His co-venturer, the defendant, Marc C. Lauzon (Lauzon), owned the defendant, Joseph Lauzon & Sons Funeral Home, Inc. After associating with Lauzon, James unceremoniously left the family's parlor in the lurch and all parties began to engage in stiff internecine competition with one another, replete with burial-bashing recriminations and other unpleasantries, including allegations of commercial "grave robbing."

On appeal the controversy is not nearly so ghoulish. It centers on whether claims alleging tortious interference with contractual relations warrant a jury trial when the claimants have requested both injunctive relief and money damages. We hold that they do. We also reject several related challenges to the sufficiency of the evidence underpinning the Superior Court judgment that was entered after a nonjury trial adjudicating the parties' respective claims.

Facts and Travel

James' grandfather, Egidio DiPardo (Egidio), established DiPardo & Sons in 1928. For many years the company was one of the most successful funeral homes in Woonsocket. James' father, Angelo, took over when Egidio passed away, and upon Angelo's death in 1977, James' mother, Elaine, succeeded to sole ownership of all the company's stock. James, who apprenticed under his father, became a licensed embalmer and funeral director in his own right. But after a bitter row with his father, James left to pursue other interests and did not return to the family fold until after his father died. In 1980 Elaine transferred 49 percent of the corporate stock in DiPardo & Sons to James. James claimed that his mother did so as a gift to him in grateful appreciation of his years of service as an underpaid apprentice and to induce him to stay on as the business manager. Elaine, on the other hand, contended that James had agreed to purchase her shares and that he executed a $58,000 promissory note in her favor in exchange for her stock. In any event James never made any payments on the note.

Although DiPardo & Sons continued to prosper under James' stewardship, relations between James and Elaine deteriorated over the ensuing years. Long-simmering tensions finally boiled over in early 1993 when the two of them could not agree on whether James should buy out all his mother's ownership in the corporation. After uttering execrable death threats against his mother and the family business, ¹ James apparently resolved not only to quit the company for good but also to bury it alive after administering some baneful last rites. Thus, during the week of February 6, 1993, James paid all the business's outstanding debts (including its mortgage), announced to the employees that their services were no longer needed, and filched client lists and other business documents for his own use. And notwithstanding that DiPardo & Sons still had some 300 pre-arranged-funeral contracts in its inventory, he posted a "Closed" sign in the window of the funeral home--presumably to ward off any off-the-street impulse buying from potential walk-in clientele.

While delivering these last and unkindest cuts of all to the mother and the business that weaned him, James associated himself with Lauzon, a principal of another Woonsocket funeral home. James and Lauzon decided to form a competing funeral-services venture (defendant Lauzon & DiPardo Funeral Home, L.L.C. (Lauzon & DiPardo)) ² and to open its doors just down the street from the existing DiPardo & Sons parlor. Over the next several weeks James and Lauzon embarked upon a course of conduct that plaintiffs characterized as a concerted effort to inter DiPardo & Sons while "grave robbing" from their roster of pre-arranged-funeral clients. Besides deliberately locating their new venture on the same street in Woonsocket as the DiPardo & Sons funeral home, James and Lauzon ran advertisements four times daily on local radio stations announcing their formation of a new burial business. These advertisements confusingly referred to the address of Lauzon & DiPardo as the firm's "new location," thereby intimating that DiPardo & Sons had simply changed its name and moved a few doors down the block. James and Lauzon also communicated with a large number of DiPardo & Sons' pre-arranged-funeral customers with an eye to inducing them to transfer their patronage to the new funeral home. Either separately or together, James and Lauzon prepared form letters. They then sent these letters to customers of DiPardo & Sons who appeared on the lists that James had spirited away from his family's business. These letters, the trial justice found, were designed to encourage DiPardo & Sons' pre-arranged-funeral clients to transfer their contracts to the newly formed Lauzon & DiPardo. Indeed, to facilitate these transfers, Lauzon, Charon-like, personally ferried some of the prospective transferors to the DiPardo & Sons premises. The plaintiffs claimed that to woo their pre-arranged-funeral customers, James employed just the right mix of unctuous charm and avuncular solicitude to sway even the most discerning of their parlor patrons to transfer their burial business to his new operation. In addition Lauzon and James filed specious complaints against the DiPardo & Sons funeral home with various state regulatory agencies. As a result, plaintiffs contended, DiPardo & Sons suffered severe financial losses.

Even as they began to sag under the brunt of this cutthroat onslaught, plaintiffs filed suit in the Superior Court on April 1, 1993. On April 6, 1993, they obtained a temporary restraining order against James and the Lauzon defendants, enjoining them from using the name DiPardo and from having any contact with individuals who had entered into pre-arranged-funeral agreements with DiPardo & Sons. And after a hearing on April 16, 1993, the court issued a preliminary injunction restraining all defendants from affirmatively soliciting DiPardo & Sons' customers and from using the DiPardo name in conjunction with their new enterprise. (However, the order expressly allowed defendants to conduct business with customers who first initiated contact with James or Lauzon). Over one year later, on June 3, 1994, the Superior Court found James in contempt of the preliminary injunction but reserved ruling on possible sanctions until the trial.

Count 1 of plaintiffs' Superior Court complaint served as a catchall for various causes of action leveled against defendants based upon the above-described allegations for which plaintiffs sought both injunctive relief and damages. ³ Count 2 sought damages based upon allegations that James had defaulted on the $58,000 promissory note. Count 3 sought damages based upon allegations that James had wrongfully converted corporate assets by unilaterally raising his salary. James counterclaimed, alleging inter alia that Elaine's stock transfer to him was a gift conditioned upon his maintenance of certain life-insurance coverage.

At first all defendants filed timely demands for a jury trial. Before trial, however, plaintiffs dismissed count 2 in its entirety without prejudice. James' estate ⁴ then retracted his earlier jury-trial demand and waived its jury-trial right with respect to count 3--the only count remaining against James' estate. In the wake of these developments the trial justice ruled that, because of its predominately equitable nature, count 1 did not require a jury trial. Thus, notwithstanding the Lauzon defendants' timely jury-trial demand and their protestations about its denial, the trial justice proceeded to try the entire case without a jury.

After hearing extensive testimony and receiving evidence from all parties, the trial justice found in plaintiffs' favor on each of the remaining counts. With respect to count 1, the trial justice stated, "I believe the activities of both Mr. Lauzon and James DiPardo to have been intentional; that James DiPardo intended to hurt his mother and his mother's business. I believe Mr. Lauzon intended to assist that in any way he could * * *." As a result the court entered judgment for plaintiffs in the amount of $285,000 compensatory damages plus interest and costs and assessed an additional $50,000 in punitive damages against each defendant. With respect to count 3, the court found that "the corporation was unaware of this unilateral and unauthorized increase in pay" and entered judgment in favor of plaintiff corporation for approximately $32,000 plus interest and costs. The court also entered a permanent injunction barring the same activities restrained by the preliminary injunction.

Analysis

I The Right to a Jury Trial for Interference with Contract Claims

We first take up the question of whether the Lauzon defendants should have been afforded a jury trial with respect to the claims lodged against them in count 1 of the complaint. Because count 2 had been dismissed and the jury demand waived for count 3 (a count that was not directed against the Lauzon defendants), count 1 was the only count remaining against the Lauzon defendants that could arguably involve the right to a trial...