Florafax Intern., Inc. v. GTE Market Resources, Inc.

• Decision Date: 28 January 1997
• Docket Number: No. 82811,82811
• Citation: 1997 OK 7,933 P.2d 282
• Parties: FLORAFAX INTERNATIONAL, INC., Appellee/Counter-Appellant, v. GTE MARKET RESOURCES, INC., Appellant/Counter-Appellee.
• Court: Oklahoma Supreme Court

Page 282

933 P.2d 282

1997 OK 7

FLORAFAX INTERNATIONAL, INC., Appellee/Counter-Appellant, v. GTE MARKET RESOURCES, INC., Appellant/Counter-Appellee.

No. 82811.

Supreme Court of Oklahoma.

Jan. 28, 1997.

Ira L. Edwards, Jr. and C. Michael Copeland, Jones, Givens, Gotcher & Bogan, Tulsa, for Appellee/Counter-Appellant.

Claire V. Eagan and William G. Bernhardt, Hall, Estill, Hardwick, Gable, Golden & Nelson, P.C., Tulsa, for Appellant/Counter-Appellee.

LAVENDER, Justice.

We consider the appropriateness of a jury award of lost profits over a two year time period in favor of appellee/counter-appellant, Florafax International, Inc. against appellant/counter-appellee, GTE Market Resources, Inc., for breaching a contract requiring GTE to provide telecommunication and/or telemarketing services for Florafax. The profits were those Florafax claimed it stood to make from a collateral contract it had with a third party, but allegedly lost when the collateral contract was canceled purportedly because GTE breached its contract with Florafax. The Court of Civil Appeals reversed the lost profit award--remanding with instructions for a determination of lost profits incurred during a sixty (60) day period, a time frame chosen on the basis the collateral contract contained a clause allowing either party to it to terminate the collateral contract on sixty (60) days notice. Both parties sought certiorari, Florafax claiming error by the Court of Civil Appeals in limiting lost profits to a sixty (60) day period and GTE attacking the propriety of any lost profit award.

We previously granted both parties' petitions for certiorari and now hold the Court of Civil Appeals erred in limiting lost profits as it did. ¹ Instead, we hold the award of lost profits was consistent with our substantive law and was supported by competent evidence. Therefore, we vacate the Court of Civil Appeals' Memorandum Opinion to the extent it disturbed the jury's verdict and trial court's judgment as to the award of lost profits. Instead, we affirm that part of the judgment awarding lost profits based on the jury's verdict.

I. STANDARD OF REVIEW.

In an action at law, a jury verdict is conclusive as to all disputed facts and all conflicting statements, and where there is any competent evidence reasonably tending to support the verdict of the jury, this Court will not disturb the jury's verdict or the trial court's judgment based thereon. Hames v. Anderson, 571 P.2d 831, 833 (Okla.1977); Wat Henry Pontiac, Inc. v. Pitcock, 301 P.2d 203, 204 Fourth Syllabus (Okla.1956). Where such competent evidence exists, and no prejudicial errors are shown in the trial court's instructions to the jury or rulings on legal questions presented during trial, the verdict will not be disturbed on appeal. Lawton Refining Co. v. Hollister, 86 Okla. 13, 205 P. 506 Second Syllabus (1922). In an appeal from a case tried and decided by a jury an appellate court's duty is not to weigh the evidence and determine which side produced evidence of greater weight [Tapley v. Patton, 349 P.2d 507, 508 (Okla.1960) ], i.e. it is not an appellate court's function to decide where the preponderance of the evidence lies--that job in our system of justice has been reposed in the jury. In a jury-tried case, it is the jury that acts as the exclusive arbiter of the credibility of the witnesses. Holley v. Shepard, 744 P.2d 945, 947 (Okla.1987). Finally, the sufficiency of the evidence to sustain a judgment in an action of legal cognizance is determined by an appellate court in light of the evidence tending to support it, together with every reasonable inference deducible therefrom, rejecting all evidence adduced by the adverse party which conflicts with it. Park v. Security Bank and Trust Company, 512 P.2d 113, 118 (Okla.1973).

II. FACTS.

Florafax is generally a flowers-by-wire company acting as a clearinghouse to allow the placement and receipt of orders between florists throughout the United States and internationally. Basically the system works as follows: retail florists become members of the Florafax network (apparently, thousands of retail florists join Florafax's wire service). Florafax maintains a list of the members and circulates a directory to them. The members are then able to send and receive orders among each other throughout the system. In other words, a consumer orders flowers at a retail florist at a certain location (e.g. Oklahoma City) to be delivered to someone in another location (e.g. Los Angeles). Florafax assists the transactions by collecting money from the florist taking the order from the customer and guarantying payment to the florist delivering the flowers. It processes the credit card activity on the transactions and charges a fee or fees for this service. Florafax also maintains a computer network whereby member florists can send and receive orders by computer--if they have such technology--without using the telephone. It also has a division that advertises floral products by the use of brochures, and other sales and promotional materials, allowing consumers to place a telephone order for floral products directly without going through a florist in their hometowns.

Evidence at trial showed at the time the agreements giving rise to this dispute were entered that Florafax was one of the largest floral wire services of its kind in the nation, and, in fact, certain evidence placed it third world-wide behind Florists' Transworld Delivery Association (FTD) and a company known as Teleflora. Evidence also showed Florafax had been headquartered in Tulsa, Oklahoma since, at least, 1979.

In addition to the above activities, Florafax solicits agreements with third party clients such as supermarket chains, American Express and other entities that advertise the sale of floral products by various methods (e.g. television, radio, newspapers, billing circulars, mass mailings to consumers) which allow a consumer to order floral arrangements via the use of a 1-800 telephone call, with Florafax agreeing to handle the actual inbound and outbound communication aspects of the transactions. In other words, when a consumer responds to an advertisement, it is not the advertiser that answers the telephone call to take the order, or that makes a telephone call or computer communication to a retail florist for fulfillment, but it is Florafax who handles these activities. Such orders would, of course, be fulfilled, if possible, by retail florist members taken from the Florafax directory maintained by it and, again, Florafax would handle the mechanics of processing the transactions, e.g. credit card processing. The advertiser would pay Florafax a certain fee or fees for its services.

One client that signed up for an arrangement like that described immediately above was Bellerose Floral, Inc., d/b/a Flora Plenty, a leading marketer of floral products advertising sales through use of the telephone number 1-800-FLOWERS. Florafax and Bellerose entered a contract in early October 1989 whereby Florafax and/or its designee would accept direct consumer orders (i.e. inbound calls and orders) placed via the 1-800-FLOWERS number and, of course, it also agreed to handle the outbound placement of orders either by telephone or computer transmission. The Florafax/Bellerose contract provided Florafax would be paid certain fee(s) per order. As we read the contract its initial term was for one year, to be automatically renewed from month to month thereafter, but that either party, with or without cause, could terminate the agreement upon sixty (60) days written notice.

GTE, on the other hand, was a company providing telecommunication and/or telemarketing services for other businesses. It provided for other businesses a call answering center where telemarketing sales representatives (TSRs) physically answered telephones when orders from promotional activities came in from consumers and took care of transmitting the orders by telephone or computer for fulfillment. For certain management and business-related reasons Florafax subcontracted out much of the telecommunication and telemarketing services of its business.

In mid-October 1989, about two weeks after Florafax signed its agreement with Bellerose, the Florafax/GTE contract was entered. In essence, it provided GTE would via a call answering center (apparently located in the Dallas, Texas area) handle much, if not all, of the activities connected with taking incoming orders and placing outgoing calls or computer transmissions directed to it by Florafax associated with the purchase and fulfillment of floral orders throughout the United States and internationally. The agreement required Florafax to pay GTE certain fees for this service depending on the type of order.

The Florafax/GTE contract generally ran for a term of three years from the effective date the parties anticipated Florafax would begin directing calls to GTE for floral orders--a date anticipated to be in early December 1989. It also contained certain provisions that in essence might result in termination after a two year period based upon application of a price/fee renegotiation clause. In answer to one of the questions submitted via a special verdict form, the jury determined the Florafax/GTE contract could be terminated after two years based on this clause.

The contract further contained a clause concerning lost profits providing in pertinent part:

20. Termination

a. Termination for cause Any non-defaulting party shall have the right to terminate this agreement at any date not less than forty-five (45) days after an event of default occurs and so long as it continues. In the event GTE[ ] ceases to perform its duties hereunder after a notice of termination is given or otherwise, Florafax may suffer tremendous damage to its business. GTE[ ] agrees to pay Florafax consequential damages and lost profits on the business lost. ²

The contract also specifically noted GTE would be providing...