Koster v. P & P Enterprises, Inc.

• Decision Date: 03 November 1995
• Docket Number: Nos. S-94-071,S-94-072,s. S-94-071
• Citation: 248 Neb. 759,539 N.W.2d 274
• Parties: , 131 Lab.Cas. P 58,026 Neil KOSTER, Appellee, v. P & P ENTERPRISES, INC., Formerly Known as Kearney Ag Center, Inc., Appellant. Neil KOSTER, Appellee, v. P & P ENTERPRISES, INC., Formerly Known as Kearney Ag Center, Inc., et al., Appellants.
• Court: Nebraska Supreme Court

Page 274

539 N.W.2d 274

248 Neb. 759, 131 Lab.Cas. P 58,026

Neil KOSTER, Appellee, v. P & P ENTERPRISES, INC., Formerly Known as Kearney Ag Center, Inc., Appellant.

Neil KOSTER, Appellee, v. P & P ENTERPRISES, INC., Formerly Known as Kearney Ag Center, Inc., et al., Appellants.

Nos. S-94-071, S-94-072.

Supreme Court of Nebraska.

Nov. 3, 1995.

Syllabus by the Court

1. Verdicts: Juries: Appeal and Error. A jury verdict may not be set aside unless clearly wrong, and it is sufficient if there is competent evidence presented to the jury upon which it could find for the successful party.

2. Verdicts: Juries: Appeal and Error. When reviewing a jury verdict, the appellate court considers the evidence and resolves evidential conflicts in favor of the successful party.

3. Verdicts: Juries: Appeal and Error. A jury verdict will not be disturbed on appeal unless it is so clearly against the weight and reasonableness of the evidence and so disproportionate as to indicate that it was the result of passion, prejudice, mistake, or some other means not apparent in the record, or that the jury disregarded the evidence or rules of law.

4. Employment Contracts: Breach of Contract: Good Cause: Proof. In proving wrongful termination under an employment agreement, the plaintiff must prove the terms of the contract, his compliance with the terms until discharge, the employers' breach, and damages. The burden then shifts to the employer to prove that good cause existed for discharge of the employee.

5. Termination of Employment: Proof. The ultimate burden of proving wrongful termination remains with employee.

6. Termination of Employment: Good Cause: Words and Phrases. Good cause for dismissal is that which a reasonable employer, acting in good faith, would regard as a good and sufficient reason for terminating the services of an employee, as distinguished from an arbitrary whim or caprice.

7. Conspiracy: Liability. A claim of civil conspiracy is not actionable in itself, but serves to impose vicarious liability for the underlying tort of those who are a party to the conspiracy.

8. Torts: Intent: Proof. The elements of tortious interference with a business relationship or expectation are (1) the existence of a valid business relationship or expectancy, (2) knowledge by the interferer of the relationship or expectancy, (3) an unjustified intentional act of interference on the part of the interferer, (4) proof that the interference caused the harm sustained, and (5) damage to the party whose relationship or expectancy was disrupted.

9. Conspiracy: Words and Phrases. A civil conspiracy is a combination of two or more persons to accomplish by concerted action an unlawful or oppressive object, or a lawful object by unlawful or oppressive means.

10. Conspiracy: Corporations: Agents. A corporation cannot conspire with an agent when the agent is acting within the scope of his or her authority.

11. Conspiracy: Corporations. A corporate official can conspire with the corporation only if he is acting in his individual capacity.

Corporations: Pleadings. In order to claim conspiracy, a plaintiff must plead in the petition that the corporate officials were acting outside the scope of their authority or other than in the normal course of their duties.

13. Conspiracy: Proof. A civil conspiracy need not be established by direct evidence of the acts charged, but may, and generally must, be proved by a number of indefinite acts, conditions, and circumstances which vary according to the purpose to be accomplished.

Jeffrey H. Jacobsen and Timothy Welsh, of Jacobsen, Orr, Nelson, Wright, Harder & Lindstrom, P.C., Kearney, for appellants.

Roger G. Steele, of Luebs, Leininger, Smith, Busick & Johnson, Grand Island, for appellee.

WHITE, C.J., and CAPORALE, FAHRNBRUCH, LANPHIER, WRIGHT, CONNOLLY, and GERRARD, JJ.

WHITE, Chief Justice.

These are appeals from jury verdicts in favor of the plaintiff-appellee, Neil Koster, on claims of wrongful termination and conspiracy to tortiously interfere with a business relationship. Koster brought two actions in the district court. These actions were consolidated for jury trial and on appeal. The first action was against defendant-appellant P & P Enterprises, Inc., formerly known as Kearney Ag Center, Inc. (Kearney Ag). Koster based this action on a claim of wrongful termination of an employment agreement he had with Kearney Ag. Koster's second action included two additional defendants-appellants, John Payne and Richard Poston. Payne and Poston were shareholders, directors, and officers of Kearney Ag. Koster's second action was based on a claim of conspiracy by Payne, Poston, and Kearney Ag to tortiously interfere with the performance of his employment agreement. Kearney Ag counterclaimed for alleged unearned commissions that Koster had collected. The jury found for Koster on both of his claims. The jury rejected Kearney Ag's counterclaim. Kearney Ag, Payne, and Poston appeal the jury verdicts.

The appellants assign three errors. They contend that (1) the jury verdicts for Koster are not sustained by the evidence and contrary to the applicable law, (2) the jury erred in its assessment of the amount of Koster's recovery, and (3) the jury awarded excessive damages to Koster out of passion or prejudice. Since the jury verdicts were not clearly wrong, we affirm.

In August 1989, as a result of a stock sale, Payne, Poston, and Koster each held a one-third interest, or 3,750 shares, in Kearney Ag. Koster had been employed with Kearney Ag since February 1987, and was a 25-percent owner of the company prior to the August 1989 stock sale. Payne, Poston, and Koster were the only members on the board of directors and were the only officers. Payne was president, Koster was vice president, and Poston was secretary-treasurer.

At the same time as the stock sale, Koster entered into a 5-year management contract with Kearney Ag where he agreed to "faithfully and industriously" perform the duties of manager "to the reasonable satisfaction of the employer." If he failed to comply with the agreement, his position would be terminated and he would be required to forfeit his stock.

In December 1989, Koster and Poston began to disagree on certain business transactions concerning Kearney Ag. Specifically, Koster alleged that Poston entered business transactions with Poston's friends without first consulting Koster. Koster strongly opposed Poston's suggestions to trade Kearney Ag inventory for land in South Dakota and to lease trucks from a local dealership. Also, Koster purchased a piece of equipment in Nebraska which Poston wanted to purchase in California. These incidents created tension between Koster and Poston.

Kearney Ag began experiencing cash flow problems. In July 1990, to remedy the cash flow situation, the three shareholders each loaned Kearney Ag $25,000 in exchange for promissory notes. At the time when Koster brought his actions, the note had an unpaid balance of $5,345.01.

During the summer of 1990, an investor from South Dakota was interested in buying 15 acres of land in Kearney owned by Kearney Ag for $150,000. The buyer was using a local Realtor, Norris Olson, to negotiate the purchase. Koster inquired of Olson as to who was interested in purchasing the land. Olson to provide any information because Payne instructed Olson not to discuss any terms of the transaction with Koster. Koster still retained his one-third interest in Kearney Ag at the time he inquired about the land sale. Subsequent to Koster's termination, the land owned by Kearney Ag was purchased by Payne and Poston in their individual capacity for $70,000.

In September 1990, the board of directors passed a resolution that required Koster to attempt to seek the approval of Payne or Poston before entering transactions that were greater than $20,000. If Payne and Poston were not available for approval, Koster was to use his best judgment in whether to go forward with the transaction.

On November 15, Koster's employment as manager was terminated by Payne. He was also removed from the board of directors and lost his position as vice president. As a result of his termination, Koster was also required to forfeit his stock in Kearney Ag. Poston took over as manager after Koster's termination.

The parties presented conflicting evidence as to why Koster was terminated. Payne and Poston testified that Koster was fired for failing to comply with his employment agreement and the board resolution. Specifically, Payne and Poston testified that Koster entered into business transactions in amounts greater than $20,000 without Payne's or Poston's approval. Koster presented evidence showing that he did not violate the employment agreement and resolution. Specifically, he testified that he sought approval of one transaction and that the other transactions were not completed until after his termination.

About 2 weeks after Koster's termination, Payne and Poston were offered $23 per share to sell the company. However, the sale was never completed. Instead, Payne and Poston sold their interest in Kearney Ag in July 1991. The appellants presented evidence from a certified public accountant that as of November 30, 1990, Kearney Ag had a value of only $33,917, or just over $3 per share.

Koster sought damages for loss of salary, commissions not paid, insurance benefits, value of his forfeited stock, and the balance due on his loan to Kearney Ag. Kearney Ag alleged that the termination was for good cause and counterclaimed for alleged unearned commissions that Koster had collected.

The jury found for Koster and awarded him damages on all of his claims. In the conspiracy lawsuit, the jury awarded Koster $86,250, or $23 per share, for his stock and $6,895.06 for the underpayment on his loan to Kearney Ag. In the wrongful termination lawsuit, the jury awarded Koster $26,112.63 for loss of salary, $3,893.50 for commissions not paid, and $2,748.24 for...