Leigh Furniture and Carpet Co. v. Isom, No. 17264

CourtUtah Supreme Court
Writing for the CourtOAKS; HALL, C.J., STEWART, J., and VeNOY CHRISTOFFERSEN; DURHAM; HOWE
Citation657 P.2d 293
Decision Date10 December 1982
Docket NumberNo. 17264
PartiesLEIGH FURNITURE AND CARPET COMPANY, Plaintiff, Appellant, and Cross-Respondent, v. T. Richard ISOM dba Richard's Fine Furnishings, Defendant, Respondent, and Cross-Appellant.

Page 293

657 P.2d 293
LEIGH FURNITURE AND CARPET COMPANY, Plaintiff, Appellant,
and Cross-Respondent,
v.
T. Richard ISOM dba Richard's Fine Furnishings, Defendant,
Respondent, and Cross-Appellant.
No. 17264.
Supreme Court of Utah.
Dec. 10, 1982.

Page 296

Gary R. Howe, W. Clark Burt, Salt Lake City, for Leigh Furniture and Carpet Co.

Arthur H. Nielsen, Clark R. Nielsen, Salt Lake City, for Isom.

OAKS, Justice:

In 1970, Leigh Furniture and Carpet Co., a corporation, sold a furniture business in St. George to T. Richard Isom on a contract specifying a $20,000 down payment for immediate possession, with the balance of $60,000 at $500 per month plus interest for ten years.

In 1975, when the contract balance was $27,000, Leigh Furniture (hereafter "the Leigh Corporation") brought this action against Isom to repossess the business, terminate his interest under the contract, and obtain a deficiency judgment for any sums due after liquidation. Isom denied that he was in default under the agreement, alleged his tender and the Leigh Corporation's refusal to accept the sum due under the contract, and counterclaimed for $100,000 damages caused when the Corporation intentionally and maliciously forced him out of business and into bankruptcy. Isom also sought punitive damages.

The jury found for Isom in all respects, including compensatory damages of $65,000 and punitive damages of $35,000 on his counterclaim. The district court denied the Leigh Corporation's motion for judgment notwithstanding the verdict, which challenged the legal and evidentiary basis for the verdict on the counterclaim. However, the court reduced the punitive damages to $13,000, and, upon Isom's accepting that remittitur, also denied the Corporation's motion for a new trial on the amount of punitive damages. Judgment was thereupon entered on the verdict against the Leigh Corporation (reduced as to punitive damages). The Corporation took this appeal, and Isom cross-appealed, challenging the reduction of punitive damages.

The issues on this appeal are exclusively concerned with Isom's recovery on the counterclaim. They are: (1) whether Utah has a cause of action for intentional interference with prospective economic relations; and, if so, (2) whether that tort was proved on the facts of this case; and (3) whether the punitive damages should have been reduced.

I. THE FACTS

With all conflicts resolved in favor of the prevailing party and all evidence viewed and inferences drawn in the light most supportive of the verdict of the jury, Cintron v.

Page 297

Milkovich, Utah, 611 P.2d 730, 732 (1980); Ute-Cal Land Development Corp. v. Sather, Utah, 605 P.2d 1240, 1245 (1980); Lamkin v. Lynch, Utah, 600 P.2d 530, 531 (1979), the facts were as follows.

Leigh Furniture, a closely held family corporation, operated a main store in Cedar City and branch stores in Kanab and St. George. The principal owner and chief executive officer was W.S. "Dub" Leigh (hereafter "Leigh"). In 1969, Leigh decided to sell the St. George store. He contacted T. Richard Isom ("Isom"), a Utah native then living in Washington State but desirous of returning to Utah, as a possible buyer. Discussions ensued, and Isom moved to St. George and began working as an employee in the Leigh store. On May 14, 1970, Isom signed the contract to buy the St. George store from the Leigh Corporation. Isom agreed to maintain the inventory, together with cash and accounts receivable, at a level of at least $60,000, and to provide the Leigh Corporation with an inventory each quarter and a financial statement each month.

In the same document, the Leigh Corporation leased Isom the parking lot and the first floor of the building containing the store, but expressly retained the second floor of the building, which consisted of 17 apartments the Corporation had leased to others. As monthly rental, Isom agreed to pay 3% of his gross sales for the previous month, with a minimum of $500 per month the first year and $600 per month thereafter. The lease term was ten years, with an option to renew for an additional ten years.

The contract also granted Isom an option to purchase the entire building, including the upstairs apartments, exercisable once he had paid the $60,000 balance on his contract. The option price was to be determined at the time of exercise by a committee of three appraisers, one to be appointed by each party and a third to be chosen by the other two.

Finally, the contract provided that if Isom defaulted in payment or performance of any term and the default remained uncured for 60 days, the Leigh Corporation could cancel the agreement, repossess the merchandise and real property, and retain all payments and rents as liquidated damages.

For one year, relations between the contracting parties were peaceful, but in June and July of 1971, Leigh began to complain about the contract and to state that he wanted to sell the entire building but prospective buyers would not purchase it subject to Isom's long-term lease and option to buy. 1 In a letter to Isom, Leigh complained that Isom was in default on his payments and was allowing his inventory to drop below $60,000. (Isom was behind in his payments at that time but was within the 60-day grace period in the contract and therefore was not in default.) At that same time, Leigh visited Isom in the store, verbally attacking him while he was with a customer and causing the customer to leave the store.

Beginning in July, 1971, Leigh, his wife, and the Corporation's bookkeeper, acting as the Leigh Corporation's agents, began a continuous pattern of visiting Isom at least once a week while he was working in his store, questioning him concerning his operation of the business, and making demands and accusations. In addition to the visits, Leigh wrote defendant letters criticizing various aspects of the business. In one week in the summer of 1971, Isom received four letters from Leigh, his wife, and his bookkeeper complaining about the furnace, the heat, and the delay in receiving the monthly financial statements. All of this conduct on Leigh's part had the cumulative effect of demoralizing and upsetting Isom and his employees, reducing their productivity, and impairing their ability to deal with the public and to conduct their business.

Page 298

At the same time, despite the existing contract with Isom, Leigh attempted to sell the building to two of Isom's employees.

In December, 1971, the Leigh Corporation's attorney again informed Isom that Leigh was dissatisfied with the contract and Isom's performance under it, and demanded an audit of the store's inventory and books. Although no provision of the contract entitled the Leigh Corporation to audit Isom's business and Leigh's demand came during Isom's busy Christmas season, Isom agreed on condition that the audit be taken after the new year and that it be confidential. The audit was performed by a certified public accountant employed by the Corporation in its Cedar City store. Following the audit, the accountant called Isom's father, an attorney who represented Isom, to inform him that a change in Isom's business was needed and to recommend that Isom bring in a business associate who had expertise in furniture retailing and who could contribute some additional working capital to the business.

The Corporation's weekly visits continued through the summer of 1972. In the spring of 1972, the Leigh Corporation's bookkeeper, on one of his visits to Isom's store, insisted that Isom date all his accounts receivable. Isom refused. Later that same summer, while visiting the store, Leigh accused Isom of subletting the parking lot in violation of the lease agreement and threatened to terminate Isom's business and repossess the store. Isom had permitted a friend to fence a portion of the vacant lot on the property he leased from the Corporation to temporarily store some merchandise for a plumbing business. In response to Leigh's threats, Isom had his friend remove his merchandise and the fence.

In June or July, 1972, Leigh again met with Isom's attorney (his father) to complain about Isom's performance under the contract. Leigh said he felt Isom maintained an inadequate inventory to act as security, and to alleviate his feelings of financial insecurity he wanted to sell the building to someone else. He also suggested that Isom bring in an associate with additional capital and more experience in furniture retailing. Specifically, Leigh suggested Brent Talbot, who had available capital and twenty years' experience in furniture retailing. Leigh indicated that if Talbot came in as a business partner "everything would be all right."

In response to this discussion, Isom's attorney began to pursue partnership discussions with a Mr. Hayes Hunter, who owned and operated a furniture store in Cedar City. On one of two trips that he and Hunter made to inspect Isom's business, they were observed together in Isom's store by the Leigh Corporation's bookkeeper. A few days later, Isom's attorney received a phone call from Leigh, who angrily told him that if he had any ideas about bringing Hayes Hunter into the business, he "could forget it" because Leigh wouldn't have Hunter in the store. Thereafter, at Hunter's request, neither Isom nor his attorney pursued any further negotiations with Hunter regarding a possible partnership.

Approximately a month later, in August, 1972, Leigh again told Isom's attorney that Isom needed to have Talbot as a partner and encouraged him to pursue negotiations toward that end. Leigh again complained about the long-term lease he had given Isom and stated that he "should kick [Isom] out" and sell the building.

Shortly after this discussion, Leigh's attorney sent Isom's attorney a complaint Leigh intended to file in court to terminate the sale agreement and dispossess Isom. Oral and written negotiations ensued, during which Isom attempted to arrive at some settlement of Leigh's complaints...

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197 practice notes
  • Orr v. Crowder, No. 15477
    • United States
    • Supreme Court of West Virginia
    • December 16, 1983
    ...270 S.C. 184, 241 S.E.2d 551 (1978); Alex v. Armstrong, 215 Tenn. 276, 385 S.W.2d 110 (1964); Leigh Furniture and Carpet Co. v. Isom, 657 P.2d 293 (Utah 1982). Contra, Georgia Power Co. v. Busbin, 242 Ga. 612, 250 S.E.2d 442 (1978); Gonyea v. Duluth, Missabe & Iron Range Ry. Co., 220 Minn. ......
  • Penna v. Toyota Motor Sales, U.S.A., Inc., No. S044053
    • United States
    • United States State Supreme Court (California)
    • October 12, 1995
    ...Court in Top Service, supra, 582 P.2d 1365, were adopted by the Utah Supreme Court. In Leigh Furniture and Carpet Co. v. Isom (Utah 1982) 657 P.2d 293, that court underlined the same concerns that had moved the Oregon Supreme Court in Top Service: "The problem with the prima facie tort appr......
  • State v. Guard, No. 20140039.
    • United States
    • Supreme Court of Utah
    • December 31, 2015
    ...S.Ct. 2510, 125 L.Ed.2d 74 (1993) (alteration in original) (internal quotation marks omitted).100 2015 UT 21, ¶¶ 34, 64, 345 P.3d 553.101 657 P.2d 293, 307 (Utah 1982).102 Eldridge, 2015 UT 21, ¶ 34, 345 P.3d 553 (internal quotation marks omitted).103 We have applied the “clear break” rule ......
  • Schwanbeck v. Federal-Mogul Corp., FEDERAL-MOGUL
    • United States
    • Appeals Court of Massachusetts
    • October 29, 1991
    ...to do injury) or wrongful means (e.g., deceit or economic coercion). Id. at 816, 551 N.E.2d 20. See Leigh Furniture & Carpet Co. v. Isom, 657 P.2d 293, 302-304 (Utah 1982). Competing[31 Mass.App.Ct. 413] for the prize is within the realm of permissible interference. Doliner v. Brown, 21 Mas......
  • Request a trial to view additional results
197 cases
  • Orr v. Crowder, No. 15477
    • United States
    • Supreme Court of West Virginia
    • December 16, 1983
    ...270 S.C. 184, 241 S.E.2d 551 (1978); Alex v. Armstrong, 215 Tenn. 276, 385 S.W.2d 110 (1964); Leigh Furniture and Carpet Co. v. Isom, 657 P.2d 293 (Utah 1982). Contra, Georgia Power Co. v. Busbin, 242 Ga. 612, 250 S.E.2d 442 (1978); Gonyea v. Duluth, Missabe & Iron Range Ry. Co., 220 Minn. ......
  • Penna v. Toyota Motor Sales, U.S.A., Inc., No. S044053
    • United States
    • United States State Supreme Court (California)
    • October 12, 1995
    ...Court in Top Service, supra, 582 P.2d 1365, were adopted by the Utah Supreme Court. In Leigh Furniture and Carpet Co. v. Isom (Utah 1982) 657 P.2d 293, that court underlined the same concerns that had moved the Oregon Supreme Court in Top Service: "The problem with the prima facie tort appr......
  • State v. Guard, No. 20140039.
    • United States
    • Supreme Court of Utah
    • December 31, 2015
    ...S.Ct. 2510, 125 L.Ed.2d 74 (1993) (alteration in original) (internal quotation marks omitted).100 2015 UT 21, ¶¶ 34, 64, 345 P.3d 553.101 657 P.2d 293, 307 (Utah 1982).102 Eldridge, 2015 UT 21, ¶ 34, 345 P.3d 553 (internal quotation marks omitted).103 We have applied the “clear break” rule ......
  • Schwanbeck v. Federal-Mogul Corp., FEDERAL-MOGUL
    • United States
    • Appeals Court of Massachusetts
    • October 29, 1991
    ...to do injury) or wrongful means (e.g., deceit or economic coercion). Id. at 816, 551 N.E.2d 20. See Leigh Furniture & Carpet Co. v. Isom, 657 P.2d 293, 302-304 (Utah 1982). Competing[31 Mass.App.Ct. 413] for the prize is within the realm of permissible interference. Doliner v. Brown, 21 Mas......
  • Request a trial to view additional results

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