Fabricor, Inc. v. E.I. Dupont Denemours & Co.

• Decision Date: 04 April 2000
• Citation: Fabricor, Inc. v. E.I. Dupont Denemours & Co., 24 S.W.3d 82 (Mo. App. 2000)
• Parties: (Mo.App. W.D. 2000) Fabricor, Inc., Respondent v. E.I. Dupont Denemours & Co. and Colt Industries, Inc., Appellant WD53668, WD53669 and WD53735 0
• Court: Missouri Court of Appeals

24 S.W.3d 82 (Mo.App. W.D. 2000)

Fabricor, Inc., Respondent v. E.I. Dupont Denemours & Co. and Colt Industries, Inc., Appellant

WD53668, WD53669 and WD53735

Missouri Court of Appeals Western District

04/04/2000

Appeal From: Circuit Court of Jackson County, Hon. David W. Shinn

Counsel for Appellant: John A. Vering, III, Lee M. Baty, and Theresa Otto

Counsel for Respondent: Stephen J. Dennis

Opinion Summary: E.I. DuPont de Nemours & Co. (DuPont) and Colt Industries, Inc. (Colt), appeal from the trial court's judgment in favor of Fabricor, Inc., in Fabricor's action for tortious interference with a business expectancy against DuPont and Colt. On appeal, DuPont and Colt claim Fabricor failed to prove that DuPont's and Colt's conduct was not justified by their own legitimate economic interests and that there was a causal connection between DuPont's and Colt's conduct and Fabricor's claimed loss of a business expectancy. DuPont and Colt also claim that the trial court erred by submitting the issue of punitive damages to the jury because Fabricor failed to prove that DuPont's and Colt's conduct was outrageous because of evil motive or reckless indifference to Fabricor's rights, and the trial court erred by refusing to instruct the jury that Fabricor was required to prove its punitive damages claims by clear and convincing evidence. In addition, Colt claims that the trial court erred by refusing to admit evidence of customer complaints regarding Fabricor which Colt received after September 9, 1992, because that evidence was relevant on the issue of justification.

This court issued an opinion on September 7, 1999, affirming the trial court's judgment in part and reversing in part. This Court granted DuPont's motion for rehearing to clarify certain factual matters and to reconsider the holding on the submissibility of Fabricor's claims for actual and punitive damages based upon DuPont's tortious interference with Fabricor's business expectancy.

Division Four holds: (1) The trial court did not err in denying DuPont's motion for directed verdict because Fabricor did present substantial evidence on the elements of causation and lack of justification to make a submissible case on its claim of tortious interference. The evidence was sufficient for the jury to find that DuPont caused the breach of the relationship between Fabricor and Marriott International in that DuPont took steps to induce the breach in the relationship by making false representations to Marriott regarding Fabricor's financial ability to perform and such steps did in fact cause the breach. The evidence was also sufficient for the jury to find that DuPont tortiously interfered with Fabricor's business relationship with Marriott by improper means when DuPont made false representations to Marriott.

(2) The trial court did not err in submitting the issue of punitive damages to the jury because there is sufficient evidence demonstrating that DuPont committed several different acts from which the jury could reasonably infer an evil motive.

(3) The trial court erred in instructing the jury that Fabricor had to prove the issue of punitive damages by only a preponderance of the evidence. The Missouri Supreme Court changed the standard of proof in punitive damage cases to clear and convincing evidence, and this case was pending when the standard changed.

(4) The trial court erred in denying Colt's motion for directed verdict on Fabricor's claim of tortious interference with a business expectancy against Colt because Fabricor did not present sufficient evidence of a reasonable business expectancy.

Patricia Breckenridge, Judge

E.I. DuPont de Nemours & Co. (DuPont) and Colt Industries, Inc. (Colt), appeal from the trial court's judgment in favor of Fabricor, Inc., in Fabricor's action for tortious interference with a business expectancy against DuPont and Colt. On appeal, DuPont and Colt claim that the trial court erred by denying their motions for a directed verdict and judgment notwithstanding the verdict because Fabricor failed to prove that DuPont's and Colt's conduct was not justified by their own legitimate economic interests and that there was a causal connection between DuPont's and Colt's conduct and Fabricor's claimed loss of a business expectancy. DuPont and Colt also claim that the trial court erred by submitting the issue of punitive damages to the jury because Fabricor failed to prove that DuPont's and Colt's conduct was outrageous because of evil motive or reckless indifference to Fabricor's rights, and the trial court erred by refusing to instruct the jury that Fabricor was required to prove its punitive damages claims by clear and convincing evidence. In addition, Colt claims that the trial court erred by refusing to admit evidence of customer complaints regarding Fabricor which Colt received after September 9, 1992, because that evidence was relevant on the issue of justification.

This court issued an opinion on September 7, 1999, affirming the trial court's judgment in part and reversing in part. We granted DuPont's motion for rehearing to clarify certain factual matters and to reconsider our holding on the submissibility of Fabricor's claims for actual and punitive damages based upon DuPont's tortious interference with Fabricor's business expectancy. Again, this court finds that Fabricor presented substantial evidence of the elements of causation and absence of justification on its claim against DuPont. Therefore, the judgment for liability and actual damages against DuPont for tortious interference is affirmed. While this court finds that Fabricor made a submissible case for punitive damages, the trial court erred in instructing the jury on the standard of proof for punitive damages. The punitive damages award against DuPont is reversed and remanded for a new trial. Finally, this court holds that Fabricor failed to make a submissible case of tortious interference against Colt because Fabricor did not offer substantial evidence that it had a reasonable business expectancy. The judgment against Colt is reversed.

I. Factual and Procedural Background

In accordance with the appellate standard of review, the following factual summary is presented in the light most favorable to Fabricor. See Davis v. Board of Educ. of the City of St. Louis, 963 S.W.2d 679, 684 (Mo. App. 1998). In 1982, Barbara Summers incorporated Fabricor, a fabrication company located in Kansas City, Missouri. Ms. Summers is the sole shareholder and president of Fabricor. Since 1985, Fabricor has employed Ms. Summers' husband, Kent Summers, as operations manager. Fabricor specializes in interior casework and millwork, such as cabinets, countertops, bathroom vanities and fixtures. It purchases solid surface products and makes them into countertops and other fixtures by cutting the raw sheets, refining them, and placing edges on them. Fabricor or other contractors then install these countertops in residences and commercial enterprises. The process of cutting the raw sheets and refining them into finished countertops is called "fabricating."

In the mid-1980s, Fabricor began purchasing Corian , a DuPont solid surface material. Fabricators, such as Fabricor, do not buy Corian directly from DuPont; rather, they purchase it from distributors. Fabricor originally purchased Corian from Colt Industries, which at that time was one of two Corian distributors for the geographical area in which Kansas City is located. During the year 1986, Fabricor purchased Corian from the other distributor for the area. The next year, Fabricor was persuaded to return to Colt by Bob Lazarony, a sales representative for Colt, because Mr. Summers was impressed by Mr. Lazarony's helpfulness in passing new technology along to Fabricor and in assisting Fabricor in developing its residential business.

In 1989, Mr. Lazarony told Mr. and Ms. Summers about a program offered by DuPont known as the certified fabricator/installer (CF/I) program. Under this program, DuPont would certify fabricators and installers who were sponsored by a distributor in the fabricator's geographical area. CF/Is could advertise that they were certified by DuPont, and would benefit from DuPont's extensive marketing of Corian . Another benefit was that a CF/I could buy Corian from any distributor in the country at a lower price than was available to other customers. However, if a CF/I bought Corian from a distributor outside the CF/I's geographical area for a project not located within that distributor's geographical area, the distributor had to pay a "passover" payment of ten percent to the distributor for the CF/I's home geographical area.

Colt sponsored Fabricor's successful application to become certified in DuPont's program. Ron Faught, territory manager for DuPont, Mr. Lazarony on behalf of Colt, and Ms. Summers, as president of Fabricor, executed a two-year CF/I contract that was in effect from October 13, 1989 until October 12, 1991. Fabricor, as the CF/I, was obligated under the agreement to maintain "a high level of quality workmanship." When this first CF/I agreement expired, Mr. Faught and Ms. Summers executed a two-year renewal contract on December 12, 1991. This agreement, in the form DuPont was executing with its CF/Is in 1991, had the additional requirements that the CF/I "maintain a high level of customer service," "investigate and resolve customer complaints," and maintain a sound financial relationship with the CF/I's distributor.

The CF/I program was a part of DuPont's marketing plan to expand its sales of Corian . Its marketing plan also included the active pursuit of national commercial accounts. In early 1992, DuPont negotiated a program with Marriott International whereby Marriott would specify Corian for all its solid surface needs in its upscale hotels. DuPont guaranteed a ceiling price to Marriott and assured Marriott of the quality of its product and the quality of the workmanship of its system...