Georgetown Manor, Inc. v. Ethan Allen, Inc.
| Citation | 991 F.2d 1533 |
| Decision Date | 28 May 1993 |
| Docket Number | 91-5600,Nos. 91-5343,s. 91-5343 |
| Parties | 38 Fed. R. Evid. Serv. 1226 GEORGETOWN MANOR, INC., a Florida Corporation, Plaintiff-Counterclaim-Defendant-Appellee, Cross-Appellant, George Levin, Plaintiff-Third Party Plaintiff-Third Party-Defendant, Classic Motor Carriages, Inc., a Florida Corporation, Thomasville Showcase Interiors, Inc., a Florida Corporation, Furniture Industries of Florida, Inc., a Florida Corporation, Plaintiffs, Joe Krau, Counterclaim-Defendant, v. ETHAN ALLEN, INC., a Delaware Corporation, Defendant-Counterclaim-Plaintiff-Third Party-Plaintiff-Appellant, Cross-Appellee, Nathan Ancell, Defendant-Counterclaim-Plaintiff-Third Party-Plaintiff. GEORGETOWN MANOR, INC., a Florida Corporation, Plaintiff-Counterclaim-Defendant-Appellant, Cross-Appellee, George Levin, Plaintiff-Third Party-Defendant, v. ETHAN ALLEN, INC., a Delaware Corporation, Defendant-Counterclaim-Plaintiff-Third Party-Plaintiff-Appellee, Cross-Appellant, Nathan Ancell, Defendant-Counterclaim-Plaintiff-Third Party-Plaintiff, Joe Krau, Counterclaim-Defendant, Classic Motor Carriages, Inc., a Florida Corporation, Thomasville Showcase Interiors, Inc., a Florida Corporation, Furniture Industries of Florida, Inc., a Florida Corporation, Third Party-Defendants. |
| Court | United States Courts of Appeals. United States Court of Appeals (11th Circuit) |
Ronald P. Weil, Weil, Robert Zarco, Lucio, Mandler, Croland & Steele, P.A., Miami, FL, Andrew L. Frey, Michael A. Vatis, Cynthia Tripi, Mayer, Brown & Platt, Washington, DC, for Ethan Allen, Inc.
Joel S. Perwin Podhurst, Orseck, Josepberg, Eaton, Meadow, Olin & Perwin, P.A., Miami, FL, for George Town Manor, Inc.
Appeals from the United States District Court for the Southern District of Florida.
Before HATCHETT and BLACK, Circuit Judges, and DYER, Senior Circuit Judge.
In this appeal involving a claim for tortious interference with a business relationship, we affirm the district court's rulings on several issues and certify to the Supreme Court of Florida one issue regarding damages recoverable under Florida law.
This appeal follows protracted litigation involving several claims and counterclaims between a furniture manufacturer, Ethan Allen, Inc. ("Ethan Allen"), and its former furniture dealer, Georgetown Manor, Inc. ("Georgetown"). The unraveling of the longstanding dealership relationship between Ethan Allen and Georgetown began in December, 1984, because of a dispute over Georgetown's credit for future furniture deliveries. On January 9, 1985, Georgetown informed Ethan Allen that it had decided to convert its five Ethan Allen galleries to Thomasville Furniture Industries, Inc. ("Thomasville") furniture outlets. Georgetown's owner, George Levin, formed a new corporation, Thomasville Showcase Interiors to operate the new Thomasville galleries at the old Georgetown locations. On January 11, 1985, Georgetown issued a press release announcing the conversion of its stores from Ethan Allen to Thomasville, stating that "Thomasville offers the best opportunities for our company as we look into the future." Georgetown also sent a letter to its past customers advising them of the conversion and announcing a conversion sale of the Ethan Allen furniture in stock.
On January 24, 1985, Ethan Allen's chairman of the board, Nathan Ancell, sent a memo to other Ethan Allen dealers stating that Georgetown owed $1.6 million as of May, 1984, and that Georgetown had allowed the bills to mount without proper payment even though Ethan Allen had been willing to help Georgetown recover. In addition, on February 3, 1985, Ethan Allen placed a one-day advertisement in several South Florida newspapers, stating:
Dear Valued Customer:
Ethan Allen recently announced a major change in the distribution in the Miami [or General Pompano] Area. Since this change affects you, our valued customer, I would like to explain the situation directly.
For about 20 years, Ethan Allen enjoyed a wonderful relationship with the Blau family who operated the Georgetown Manor stores in the Miami area.
Because of family illness, the business was sold to a new group. Financial problems developed and our bills were not paid. The debt rose to a high level and we could no longer deliver merchandise to them until the debt was reduced. Reluctantly, we then had to discontinue distribution of Ethan Allen by Georgetown completely. We, therefore, are presently opening new Ethan Allen galleries in this area to serve our many customers of long standing.
One of our fine dealer families in the area, Bob and Brenda Stacy, have established an Ethan Allen office in our present Ethan Allen Contemporary Gallery at 5070 N. Federal Highway, Lighthouse Point (Pompano). The phone number is 305-421-5300. This Gallery will soon become an Ethan Allen American Traditional Gallery. The Stacys will be opening other Ethan Allen Galleries very shortly to serve you.
Many Ethan Allen customers have unfilled orders with Georgetown Manor. We and the Stacys are very anxious to effect deliveries of these orders and can handle them very expeditiously.
Please contact Stacy's Service Center in Pompano and they will handle your inquiries and orders. Again, the number is 305-421-5300.
The new galleries will be called Ethan Allen Carriage House and will continue to bring you our beautiful furniture and professional services.
We are sorry about this disruption as we took great pains to avoid it.
We look forward to serving you again.
Nathan S. Ancell /s
Nathan S. Ancell
Chairman of the Board
Ethan Allen Inc.
Danbury, CT 06811
On January 8, 1985, Georgetown filed an action against Ethan Allen seeking damages and a preliminary injunction compelling Ethan Allen to deliver furniture pursuant to the dealership relationship. During the next several months, Georgetown amended its complaint to include the following six claims against Ethan Allen: (1) intentional interference with the advantageous business relationship between Georgetown and Thomasville; (2) conversion of commissions which Georgetown would have earned on undelivered furniture; (3) breach of contract based on Ethan Allen's failure to provide Georgetown with an adequate period of time to terminate their relationship, and based on Ethan Allen's failure to arrange less burdensome payment terms for it as a dealer with satisfactory credit standing; (4) misrepresentation based on Ethan Allen's failure to provide adequate notice of termination and failure to arrange less burdensome payment terms; (5) trade libel and slander based on the publication of a January 24, 1985 dealer memorandum to all Ethan Allen dealers and the publication of a February 3, 1985 advertisement; and (6) violations of the Sherman and Clayton Acts based on Ethan Allen's alleged attempts to maintain market power and monopoly position as a furniture supplier in South Florida. Georgetown also added Levin as a plaintiff and Ancell as a party defendant in its amended complaint.
Ethan Allen answered Georgetown's complaints and asserted the following eight counterclaims against Georgetown, George Levin, and another company which Levin owns, Classic Motor Carriages, Inc. ("Classic Motor"); (1) an account stated claim for the amount that Georgetown owed Ethan Allen for previously delivered furniture; (2) misrepresentations based on Georgetown's representations that it had sufficient funds to make timely payments for the furniture being delivered; (3) fraudulent concealment of the fact that Georgetown did not have sufficient funds to pay for furniture being delivered; (4) fraudulent conveyance based on transfers of Georgetown's assets to Levin, Thomasville, Classic Motor, or others without adequate consideration and without regard to On July 28, 1986, the district court dismissed all of Georgetown's claims except the tortious interference claim. On April 13, 1987, the district court granted summary judgment against Georgetown on four new claims (breach of fiduciary duty, violation of the Connecticut Franchise Act, maintenance, and violation of Florida's Security of Communications Act) it raised in a third amended complaint. In addition, on October 24, 1988, the district court granted summary judgment against Georgetown on its renewed claim that Ethan Allen violated the Sherman and Clayton Acts. Georgetown filed its fourth and final amended complaint on November 6, 1989, dropping Levin and Ancell as parties and alleging only a tortious interference claim and a conversion claim against Ethan Allen. Georgetown's amended tortious interference claim alleged that "Ethan Allen wrongfully interfered with plaintiff Georgetown's customers, past, present, and future," as opposed to its earlier allegation of interference with its relationship with Thomasville. In an order denying Ethan Allen's motion for summary judgment, the district court limited the scope of proof on Georgetown's tortious interference claim to exclude prospective customers as a yardstick for lost profits. Order Denying Motions for Summary Judgment (March 30, 1990) (ruling that "Georgetown must show interference with an existing contractual or business relationship, coupled with legal rights and damages.") (emphasis in original).
Georgetown's debts to Ethan Allen; (5) conspiracy to commit civil theft based on an alleged scheme to obtain Ethan Allen's furniture without paying for it; (6) civil theft; (7) conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act (RICO); and (8) violations of RICO.
Thus, the case proceeded to trial before a jury on Georgetown's conversion claim, Georgetown's tortious interference as limited in the March 30, 1990, order, and Ethan Allen's several counterclaims. At the close of Georgetown's case, the district court directed a verdict in favor of Ethan Allen on the conversion claim. At the close of the trial, on February 12, 1991, the district court entered an order dismissing Ethan Allen's civil theft, RICO, and...
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