Monette v. AM-7-7 Baking Co., Ltd., AM-7-7
| Decision Date | 05 April 1991 |
| Docket Number | AM-7-7,No. 90-1413,90-1413 |
| Citation | 929 F.2d 276 |
| Parties | Gary L. MONETTE d/b/a Gary's International Bread, Plaintiff-Appellee, v.BAKING COMPANY, LTD. d/b/a International Baking Company and Antonio Malandruccolo, Defendants-Appellants. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Jerry R. Swift (argued), Keith M. Aretha, Eames, Wilcox, Mastej, Bryant, Swift & Riddell, Detroit, Mich., for plaintiff-appellee.
David B. Rosenberg (argued), Rosenberg & Nelson, Southfield, Mich., for defendants-appellants.
Before NORRIS, Circuit Judge, WELLFORD, * Senior Circuit Judge, and FORESTER, ** District Judge.
This is a direct appeal from a Memorandum Opinion and Order denying defendants' motions for a judgment notwithstanding the verdict and for a new trial. Plaintiff-appellee, Gary L. Monette d/b/a Gary's International Bread ["Monette"], filed an action in the Eastern District of Michigan on April 26, 1989 against defendants-appellants, AM-7-7 Baking Company, Ltd., an Ontario, Canada corporation d/b/a International Baking Company ["International Baking"] and Antonio Malandruccolo [collectively "Defendants"]. Malandruccolo is the president and sole shareholder of International Baking. Monette's complaint alleged tort counts of intentional interference with prospective economic advantage; interference with contractual relations; defamation; and misuse of trade secrets. Jurisdiction is based upon diversity of citizenship between the parties. Monette essentially claims that Defendants used improper and unlawful means to destroy his bread route business so that Defendants could usurp that business for their own benefit.
The matter was tried to a jury on November 2, 1989. Monette abandoned his claim for defamation shortly before trial. At the close of Monette's proof, Defendants moved for a directed verdict on the three remaining counts. The trial court dismissed the counts on interference with contractual relations and misuse of trade secrets. The matter went to the jury on the sole claim of intentional interference with prospective economic advantage. The parties filed joint jury instructions with the court on the day of trial. The jury returned a verdict in favor of Monette that day and judgment was entered on the jury verdict in favor of Monette for $60,000 in damages on November 9, 1989. 1 The judgment was joint and several as to the Defendants. Defendants moved for a judgment notwithstanding the verdict and for a new trial. The trial court denied the motions in a memorandum opinion and order dated March 15, 1990. On March 29, 1990, the Defendants filed their notice of appeal contesting the memorandum opinion and order that denied Defendants' motions for a JNOV and a new trial. This Court affirms.
On or about September 30, 1988, Monette purchased a bread route owned by Sam Picarella for $28,000. Picarella had owned the route for about six and one-half years, having purchased the route from a former owner for $30,000. Although the customers on the route would change from time to time, the route had been in existence since prior to 1977. For the $28,000 price, Monette purchased a truck and a list of customers that Picarella had been servicing.
Two-thirds of the bread products that Monette sold to his retail customers were purchased from International Baking, an Italian bread baking business located in Windsor, Ontario in Canada. Other breads not from International Baking, Syrian or pita bread from Fran's in Windsor and hamburger and hot dog buns from Brown's Bakery in Detroit, made up the remaining third of the sales. Monette purchased the bread wholesale from International Baking and the other suppliers, sold it to his retail customers at a higher price, and earned a profit on the difference. The original owner of the bread route, his successor Picarella, and Monette did not have a contract with International Baking for the purchase and resale of the bread products. Thus, International Baking had no obligation to sell or to provide Monette with bread products, and Monette was likewise not committed to buy any products from International Baking. The parties merely had an ongoing relationship in which they voluntarily transacted business--the sale and purchase of bread products--from day to day.
Within about three weeks after Monette purchased the route from Picarella, Malandruccolo approached Picarella to determine if Picarella would take the bread route back from Monette. Picarella stated that he did not want the route. Malandruccolo replied that he did not like Monette and stated that "I am going to boot him out of here."
Monette testified that he was harassed by Malandruccolo and other personnel of International Baking. Harassment consisted of refusing to talk to Monette on some occasions, yelling at Monette on other occasions, and making unreasonable demands upon Monette. Defendants claim that Monette's sales were down, although Monette's evidence established that sales had not diminished.
International Baking did not have a complete list of the names of Monette's customers. In November 1988, International Baking sent one of its employees, Earl Bondy, to accompany Monette on the route under the pretext of helping Monette increase sales of bread. Monette was told Bondy was to accompany Monette on the route for one week, although Bondy actually accompanied Monette for only one day. During the course of the day Monette discovered that Bondy was compiling a list of Monette's customers. Bondy assured Monette that he was compiling a list of the customers merely as evidence to International Baking that Bondy had done his job of talking with the customers. Monette contends that the intention of Defendants was to trick Monette into letting Bondy compile a list of his customers so that International Baking could steal the route away from Monette.
On February 21, 1989, Defendants, without warning, informed Monette that International Baking would no longer sell bread to him. On that same day, Defendants used the customer list they had obtained through Bondy to locate Monette's retail customers. Malandruccolo and Bondy visited Monette's retail customers in the United States and told each that International Baking would be taking over the route, that they no longer could buy the bread of International Baking from Monette, and that International Baking would sell the products directly to them. When Monette asked if International Baking would be taking over the pita bread and buns from rival bakeries which Monette had been purchasing, Earl Bondy responded, "Hey, that is part of the route."
International Baking thereafter effectively assumed Monette's bread route. Bread products were delivered to the retail customers by a driver employed by International Baking. In addition, various bread products previously purchased by Monette from rival bakeries were replaced by similar products manufactured by International Baking. Once Monette learned that International Baking had ceased selling bread products to him, he asked his retail customers if they would accept an alternative product in place of International Baking breads. While some customers indicated interest in an alternative product and some did not, Monette concluded that he could not find a replacement product in time to adequately serve his customers. Monette accordingly concluded that his bread route business had failed, and he was forced to abandon the route. Although some evidence at trial indicated that Monette was interested in getting out of the bread route business, Monette testified that he was considering selling the route rather than abandoning it. He further testified that his interest in selling the business was due to the harassment he received from Defendants and other personnel of International Baking.
The issue before the Court is whether the district court properly denied Defendants' motions for a judgment notwithstanding the verdict or for a new trial. In other words, the issue is whether Monette introduced sufficient evidence at trial to prove Defendants intentionally interfered with prospective economic advantage under Michigan law.
Monette's theory is that he proved all the elements of the tort of intentional interference with prospective economic advantage. Defendants' main arguments are that no evidence was introduced at trial that Defendants pressured Monette's retail customers to cease buying bread from Monette, and, in any event, that International Baking was justified in terminating its relationship with Monette because he was not servicing the route effectively.
Monette responds that, under Michigan law, he merely needed to prove that Defendants intentionally committed acts that caused Monette's customers to discontinue their business relationships with Monette and that such interference by Defendants was improper or unjustified. The evidence was uncontroverted at trial that, after February 21, 1989, International Baking refused to sell Monette any bread products. Monette testified that this event caused his bread route to fail. Furthermore, evidence was presented that Defendants used fraudulent and deceptive means to coerce Monette into disclosing his customers to Defendants so that Defendants could take over the bread route for their own benefit. Monette contends, therefore, that he presented sufficient evidence for the trial court to submit the case to the jury. The jury having concluded that Defendants intentionally interfered with the relationship between Monette and his customers, and that such interference by Defendants was improper, Monette insists that the trial court properly denied Defendants' motions for a judgment notwithstanding the verdict or for a new trial.
On a motion for a judgment notwithstanding the verdict or for a directed verdict, the district court must determine whether there was sufficient...
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