Kantel Communications, Inc. v. Casey

• Decision Date: 31 August 1993
• Docket Number: No. WD,WD
• Citation: 865 S.W.2d 685
• Parties: KANTEL COMMUNICATIONS, INC., Appellant-Respondent, v. Clarence CASEY, Defendant, and James B. Hansen, Appellant, and Best Serve, Inc., Respondent. 46908.
• Court: Missouri Court of Appeals

Page 685

865 S.W.2d 685

KANTEL COMMUNICATIONS, INC., Appellant-Respondent, v. Clarence CASEY, Defendant and James B. Hansen, Appellant and Best Serve, Inc., Respondent.

No. WD 46908.

Missouri Court of Appeals Western District.

Aug. 31, 1993.

Motion for Rehearing and/or Transfer to

Supreme Court Denied Nov. 2, 1993.

Application to Transfer Denied Dec. 21, 1993.

C.E. Weedman, Jr., Harrisonville, for appellant-respondent.

F. Allen Speck, Kansas City, Lynn K. Ballew, Harrisonville, for respondents-appellants.

Before FENNER, P.J., and SPINDEN and SMART, JJ.

SPINDEN, Judge.

When Best Serve, Inc., persuaded the Cass County sheriff to let it install a telephone system in the county jail, competitor Kantel Communications, Inc., sued Best Serve, Kantel's former sales manager, James Hansen, and Kantel's former salesman, Clarence Casey, for tortiously interfering with Kantel's business expectation. Kantel accused Best Serve of collaborating with Hansen and Casey to divert the Cass County business away from Kantel to Best Serve.

A jury found for Kantel and awarded it $300,000 in actual damages. It assessed $65,000 in punitive damages: $10,000 against Hansen, $5000 against Casey, and $50,000 against Best Serve. The trial court granted Best Serve's motion for judgment notwithstanding the verdict, and Kantel appeals. The trial court let stand a verdict against Hansen, and he appeals. Casey does not appeal. We reverse the trial court's judgment notwithstanding the verdict. We affirm the judgment against Hansen.

Hansen and Casey solicited orders for Kantel's installing telephone systems in municipal and county jails. During January 1990, Hansen convinced Maizie Wiggins, the Cass County jail administrator, and Cass County Sheriff Homer Foote to install a Kantel system in the jail. Foote signed a document purporting to be a contract with Kantel. Foote did not involve the county commission in the decision. Hansen did not inform Kantel management of the contract. He gave it to Casey, who held it.

Kantel fired Hansen as its sales manager on March 5. Hansen had known since the previous December that Kantel would fire him and immediately had begun planning, with Pete Lorenz, the organization of a firm, to be known as Best Serve, to compete with Kantel. On March 12, Best Serve was incorporated with Lorenz as its president. Best Serve hired Hansen on March 15.

In the meantime, in mid-March, Wiggins asked Hansen why Kantel had not installed the system. Hansen told her that Kantel had financial problems and could not fill orders. He arranged a meeting with Wiggins and Foote on March 28, 1990. Lorenz accompanied Hansen to the meeting. Lorenz knew that Hansen had solicited the Cass County business for Kantel. At the meeting, after Hansen again reported that Kantel was having financial problems, Foote threw the Kantel document in a trash can and signed a new document authorizing Best Serve to install a system in the county jail. Foote said at trial that he had decided to cancel the arrangement with Kantel before his meeting with Lorenz and Hansen because Kantel had not installed the system within the time promised by Hansen. Best Serve installed phones in the jail during April 1990.

Kantel's president, Richard Thompson, learned on April 18, 1990, that his firm had lost the Cass County business. Thompson testified that Kantel did not have financial trouble and could have installed a system in the jail during February and March.

I.

Kantel charges the trial court with error in sustaining Best Serve's motion for judgment n.o.v. The trial court explained its ruling:

There was no evidence that Defendants Hansen or Casey were acting as agents for Defendant Best Serve, Inc., when Defendant Hansen called Maizie Wiggins in mid-March, 1990, and advised her that the plaintiff was having financial difficulties. There was, therefore, no evidence that any alleged wrongful acts of defendant Hansen or defendant Casey were performed in an agency relationship on behalf of Defendant Best Serve, Inc.

The trial court's ruling was reversible error.

A.

Although the trial court's reasoning was correct, it overlooked the March 28 meeting of Hansen, Lorenz, Foote, and Wiggins. That meeting supports the jury's finding that Hansen was working in Best Serve's interest and contrary to his duty to Kantel. Best Serve acknowledges this in its brief: "Hansen was admittedly authorized to act on behalf of Best Serve at the March 28 meeting among Sheriff Foote, Hansen and Lorenz[.]" Moreover, the jury heard evidence that even before the March 28 meeting, Hansen and Lorenz had been discussing organization of a competing firm.

Best Serve argues, however, that the March 28 meeting was insignificant because Foote said that he had already made up his mind before the meeting to terminate his agreement with Kantel. This argument fails because the sheriff's change of mind was based on Hansen's misinformation, to which Best Serve acquiesced.

Hence, we conclude--from the March 28 meeting, Hansen's prior discussions with Lorenz about organizing a competitor for Kantel, and Hansen's and Casey's joining Best Serve after failing to inform Kantel management of the Cass County order--that the jury had sufficient evidence to render a verdict in favor of Kantel against Best Serve. "The existence of agency and the authority of an agent can be implied by proof of facts, circumstances, words, acts, and the conduct of the party to be charged with the agency.... The key to conduct is the knowing acquiescence of the principal in the past acts." M.D. and Associates, Inc., v. Sears, Roebuck & Company, 749 S.W.2d 454, 456 (Mo.App.1988).

B.

Best Serve argues in the alternative that we should affirm the judgment n.o.v. because Kantel's petition failed to state a claim against Best Serve. It asserts that Kantel could not state a claim against it without alleging that Best Serve and Hansen had a master-servant relationship. It reasons that the petition did not aver that Best Serve had anything to do with Hansen's and Casey's actions and, therefore, the trial court should have dismissed the petition against it.

1.

Best Serve raised the issue for the first time in its motion for judgment n.o.v. It filed a motion to dismiss for failure to state a cause of action, but the only ground asserted in that motion was that the petition did not set out any facts supporting the contention that Best Serve acted "intentionally and without justification or excuse."

A litigant may challenge the sufficiency of a petition's allegations at any stage of a proceeding, even on appeal, but the challenger's burden becomes much greater if the challenge comes for the first time after judgment. " 'A petition will be found sufficient after judgment if, after allowing those reasonable inferences and matters necessarily implied from the facts stated, there [are] sufficient [allegations] to advise the defendant with reasonable certainty as to the cause of action it is called upon to meet[.]' " Sprung v. Negwer Materials, Inc., 775 S.W.2d 97, 101, 102 (Mo. banc 1989) (quoting Sumpter v. J.E. Sieben Construction Company, 492 S.W.2d 150, 153 (Mo.App.1973)).

Judged in light of this standard, we conclude that Kantel's petition was sufficient--barely. After the petition described Hansen's and Casey's actions in diverting the business from Kantel, the petition stated:

12. Defendant HANSEN and/or Defendant CASE ... informed representatives of the Cass County Sheriff's Department that Plaintiff [Kantel] was unable to perform under the contract, was having financial problems, and caused Cass County to terminate the contract with Plaintiff, and enter into a contract for the installation of telephone equipment with Defendants.

13. Defendant HANSEN, in April, 1990, installed telephone equipment, acting on his own behalf and that of BEST SERVE, INC., in the Cass County Jail, to the detriment of Plaintiff.

14. A contract and contract expectancies existed between Plaintiff and Cass County, Missouri, which was breached by Defendant HANSEN and/or Defendant CASEY and Defendant BEST SERVE, INC., d/b/a BEST SERVE OF KANSAS, INC. and CELL BLOCK PHONES.

15. That Defendants took such actions intentionally and without justification or excuse.

Giving these allegations their reasonable inferences, they were adequate to advise Best Serve that Kantel was accusing it of participating with Hansen and Casey in the tortious interference of Kantel's expectancy of installing a telephone system in the Cass County jail. This becomes obvious from Best Serve's going to trial and defending the action without raising the issue of agency in any mode until after judgment.

2.

Best Serve argues that we should affirm the judgment n.o.v. because Kantel did not plead or prove the elements of interference with contract relations or a business expectancy. Those elements are:

(1) A contract or a valid business relationship or expectancy (not necessarily a contract); (2) Defendant's knowledge of the contract or relationship; (3) Intentional interference by the defendant inducing or causing a breach of the contract or relationship; (4) The absence of justification; and, (5) Damages resulting from defendant's conduct.

Fischer, Spuhl, Herzwurm & Associates, Inc. v. Forest T. Jones & Company, 586 S.W.2d 310, 315 (Mo. banc 1979).

a.

Best Serve argues that Kantel did not plead or prove the first element, a valid contract or contract expectancy with Cass County. Kantel's petition alleged that Hansen "submitted a contract to HOMER L. FOOTE ... for the installation of phones in the Cass County Jail, and Sheriff FOOTE signed said contract[.]" Kantel also pleaded that "[a] contract or contract expectancies existed between [Kantel] and Cass County[.]" Kantel proved a valid business expectancy.

(1)

Kantel established that it had business expectations with Cass County based on the document signed by Foote in January, even if that document was not a contract. The...