Employers Liability Assurance Corp. v. Freeman, 5116.

• Citation: 229 F.2d 547
• Decision Date: 27 December 1955
• Docket Number: No. 5116.,5116.
• Parties: EMPLOYERS LIABILITY ASSURANCE CORPORATION, Ltd., an English corporation, Appellant, v. F. Carroll FREEMAN, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)

229 F.2d 547 (1955)

EMPLOYERS LIABILITY ASSURANCE CORPORATION, Ltd., an English corporation, Appellant, v. F. Carroll FREEMAN, Appellee.

No. 5116.

United States Court of Appeals Tenth Circuit.

December 27, 1955.

Rex H. Holden, Oklahoma City, Okl., for appellant.

Delmer L. Stagner, Oklahoma City, Okl. (Erwin Alpern, Oklahoma City, Okl., on the brief), for appellee.

Before BRATTON, MURRAH and PICKETT, Circuit Judges.

BRATTON, Circuit Judge.

F. Carroll Freeman instituted this action against Employers Liability Assurance Corporation. The purpose of the action was to recover damages for the wrongful interference with the contractual relations between F. Carroll Freeman and Chester G. Freeman. Despite the identity in surnames, there was no kinship between the two Freemans. For convenience, F. Carroll Freeman will be referred to as Carroll; Chester G. Freeman as Chester; and Employers Liability Assurance Corporation as the insurance carrier. The cause was tried to a jury. The jury returned a verdict for Carroll; judgment was entered upon the verdict; and the insurance carrier appealed.

Asserted error is predicated upon the action of the trial court in denying the motion of the insurance carrier for a directed verdict. The motion was made at the conclusion of all the evidence and the ground thereof was that the insurance carrier merely acted for the protection of its legal rights and therefore was not liable in damages for the termination of the contractual relation of attorney and client existing between Carroll and Chester. It is the well settled general rule of law in Oklahoma that if one employs fair means and acts in good faith and with justification for the protection of his legal rights, he is not liable in damages even though his acts and conduct constitute interference with the contractual rights of another; that on the other hand, if one maliciously interferes with a contract between two parties and induces one of them to break that contract to the injury of the other party, the injured party may maintain an action in tort against the wrongdoer; and that if the procurement of the breach is intentional and without excuse, it is malicious. Schonwald v. Ragains, 32 Okl. 223, 122 P. 203, 39 L.R.A.,N.S., 854; Prairie Oil & Gas Co. v. Kinney, 79 Okl. 206, 192 P. 586; Bliss v. Holmes, 156 Okl. 40, 9 P.2d 718; National Life & Accident Insurance Co. v. Wallace, 162 Okl. 174, 21 P.2d 492. And these general principles have application to the interference of the contractual relation between an attorney and his client. Klauder v. Cregar, 327 Pa. 1, 192 A. 667; Keels v. Powell, 207 S.C. 97, 34 S.E.2d 482; cf. Neff v. Willmott, Roberts & Looney, 170 Okl. 460, 41 P.2d 86.

It is axiomatic that when the jury has observed the witnesses while testifying, has appraised their credibility, has determined the weight to be given to their testimony, has drawn reasonable inferences from the facts established, has resolved conflicts, and has reached its ultimate conclusion in the form of a general verdict, an appellate court will take that view of the evidence most favorable to the prevailing party and will uphold the verdict against a challenge of this kind if there is substantial evidence to support it. Lavender v. Kurn, 327 U.S. 645, 66 S.Ct. 740, 90 L. Ed. 916; Loew's, Inc., v. Cinema Amusements, Inc., 10 Cir., 210 F.2d 86, certiorari denied 347 U.S. 976, 74 S.Ct. 787, 98 L.Ed. 1115.

Viewed in the light most favorable to the prevailing party, there was evidence which tended to establish these facts. Carroll was an attorney engaged in the practice of law. Chester was an employee of a construction company whose business was within the purview of the Workmen's Compensation Act of the state, 85 O.S.1951 § 1 et seq. The insurance carrier issued to the construction company a policy of workmen's compensation and employer's liability insurance, and Chester was within its coverage. Chester sustained serious personal injury in the course of his employment. It was believed that negligence on the part of a third party was the proximate cause of the injury. Chester consulted Carroll. Carroll advised Chester that it appeared he had a cause of action against the third party. Chester employed Carroll generally as his attorney in connection with the accident and resulting injury. Carroll's compensation was to be a per cent of the amount recovered. Carroll made some investigation and arranged for pictures taken on the premises where the accident occurred. He then called on the telephone the agent in charge of the claim department of the insurance carrier and told him that he had been retained by Chester. The two of them arranged for a conference the next morning to discuss the possibility of arranging to have compensation benefits paid to Chester even though it was decided to proceed against the third party. The agent in charge of the claim department told Carroll that a claim adjuster was working on the case and that he would like for the claim adjuster to take part in the conference. That afternoon the claim adjuster went to the hospital and talked with Chester. With knowledge that Carroll had been retained, the claim adjuster told Chester that he did not need a lawyer; that the insurance carrier would take care of everything, including doctor's bills, nurses' bills, hospital bills, and car payments; and that it would pay him $25 per week while he was sick. The claim adjuster further told Chester that there was $12,500 for him at the state capitol. And he further told Chester that "if we got mixed up in a lawsuit, these payments would have to be stopped". Through a relative of Chester, Carroll was summoned to the hospital. When he entered Chester's room the claim adjuster was there. Chester said "Well, I guess I won't need you after all, Carroll. Mr. Chance tells me that I don't need a lawyer, that his company can handle everything for me, and that it won't cost me a dime." Carroll stated that the claim adjuster knew Chester was entitled to the benefits under the compensation law and that the insurance carrier was obligated to pay him benefits regardless of who represented him. In reply to that statement, the claim adjuster said "Well, we are not going to." Actuated by the statements made by the claim adjuster, and without any dissatisfaction with Carroll, Chester terminated Carroll's employment. The agent in charge of the claim department of the insurance carrier directed the claim adjuster to see a representative of the construction company and solicit his help in getting Chester to employ the attorney for the insurance carrier. The claim adjuster told Chester that the attorney for the insurance carrier would like to talk to him and inquired whether it would be all right. The claim adjuster brought the attorney to the hospital and he was employed to institute suit against the third party. It was agreed that his compensation would be a per cent of the amount recovered. Chester and the attorney first met when the attorney came to the hospital. Acting through the attorney thus employed, Chester instituted a suit for damages against the third party tort-feasor, and while the case was on trial it was settled for $45,000. Considered in its entirety, the evidence together with the inferences fairly to be drawn from it was abundantly sufficient to take the case to the jury on the pivotal issue whether in the making of the several crucial statements to Chester, the insurance carrier acted in good faith for the protection of its legal rights or without excuse interfered with the contractual relation of attorney and client existing between Carroll and Chester, to the injury of Carroll; and therefore the motion for a directed verdict was properly denied.

Complaint is made that the court gave to the jury an instruction as follows:

"The defendant in its case had a right to protect its own interests under such workmen\'s compensation policy and to take any lawful steps to see that its interests were protected. The defendant, however, did not have the right intentionally to interfere with plaintiff\'s employment by Chester Freeman, nor intentionally without just cause or excuse to cause Chester Freeman to discharge plaintiff as his attorney, or to cause him to employ an attorney selected by the defendant."

It is argued that the insurance carrier had the right to interfere with Carroll's contract of employment if the insurance carrier was acting for the protection of its own legal rights. The instruction must be considered as a whole, and it must also be considered in connection with all of the other instructions given to the jury. The instruction concerned itself with the right of the insurance carrier to protect its own legal rights under the policy of insurance. At the outset of the instruction, the jury was charged in clear and unmistakable language that the insurance carrier had the right in law to protect its own interests under the policy. And by the subsequent portion of the instruction, the jury was charged in effect that while the insurance carrier had the right to protect its own interests under the policy, it did not have the right in law intentionally and without just cause or excuse to interfere with Carroll's employment, to cause his discharge, or to further the employment of another attorney selected by the insurance carrier. In respect to both of its features, the instruction was a correct statement of applicable principles of law and therefore is not open to the criticism directed against it.

The further complaint is that the court erred in giving to the jury an instruction in this language:

"It is actionable wrong for one to interfere maliciously with a contract between two parties and thereby induce one of such parties to break that contract to the injury of the other and `to maliciously\' as used means a wrongful act done intentionally without just cause or excuse, and in this connection you are instructed that there is

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