Seven D. Enterprises Ltd. v. Fonzi

• Citation: 438 F. Supp. 161
• Decision Date: 07 September 1977
• Docket Number: Civ. A. No. 7-70251.
• Parties: SEVEN D. ENTERPRISES, LTD., a Michigan Corporation and Len J. Dillon, Jr., Individually and as assignee of Bradford Trucking Co., a Michigan Corporation, Plaintiffs, v. Angelo FONZI and Transportation Management Corp., a Pennsylvania Corporation, jointly and severally, Defendants.
• Court: U.S. District Court — Western District of Michigan

438 F. Supp. 161

SEVEN D. ENTERPRISES, LTD., a Michigan Corporation and Len J. Dillon, Jr., Individually and as assignee of Bradford Trucking Co., a Michigan Corporation, Plaintiffs, v. Angelo FONZI and Transportation Management Corp., a Pennsylvania Corporation, jointly and severally, Defendants.

Civ. A. No. 7-70251.

United States District Court, E. D. Michigan, S. D.

September 7, 1977.

Nathan E. Shur, Zeff & Zeff, Detroit, Mich., for plaintiffs.

Thomas F. Koernke, Warner, Norcross & Judd, Grand Rapids, Mich., for defendants.

OPINION AND ORDER DENYING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

KEITH, Chief Judge.

The defendants have moved for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. Briefs were filed in support of and in opposition to this motion, and the matter came on for a hearing on April 25, 1977. At the conclusion of the hearing, the court denied defendants' motion. Subsequent to the hearing, it came to the court's attention that it had not had before it an affidavit prepared by the defendant Angelo Fonzi for the court's consideration in connection with the motion for summary judgment. Therefore, the defendants moved pursuant to Rule IX(n) of the Local Court Rules for reconsideration by the court of its decision of April 25, 1977, denying the motion for summary judgment. Further briefs have been received in support of and in opposition to the motion for summary judgment and the request for reconsideration. The court is now fully advised in the premises.

The court will grant defendants' request for reconsideration of the decision of April 25, 1977, denying their motion for summary judgment and will re-examine the arguments in support of and in opposition to this motion.

A motion for summary judgment shall be granted if it appears from the affidavits submitted in support of and in opposition to the motion and from the pleadings, depositions, answers to interrogatories, and admissions, if any, that are a part of the record that "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." F.R.Civ.P. 56(c). The court does not sit to try disputed issues of fact on a summary judgment motion, but only to determine whether such issues exist to be tried. Felix v. Young, 536 F.2d 1126, 1130 (6th Cir. 1976); Cox v. American Fidelity & Cas. Co., 249 F.2d 616, 618 (9th Cir. 1957). The court will be especially reluctant to grant the motion if it appears that the action involves the state of mind of one of the parties. Croley v. Matson Navigation Co., 434 F.2d 73 (5th Cir. 1970).

This is an action alleging tortious interference by the defendant Angelo Fonzi with the contractual relationship between the plaintiffs Bradford Trucking Co. (hereinafter Bradford), a Michigan corporation, and Seven D. Enterprises (hereinafter Seven D.), a Michigan corporation, and Interstate Motor Freight Systems (hereinafter Interstate), a Michigan corporation not a party to this action. Defendant Fonzi, acting on Interstate's behalf as its Vice President and General Manager of its Steel Hauling Division, concluded agreements with Bradford and Seven D. in April, 1974, whereby Bradford was designated the Interstate agent in the Detroit and Toledo, Ohio, metropolitan areas, and Seven D. was to lease certain equipment to Interstate's Steel Hauling Division. Interstate's Steel Hauling Division was operated by Transportation Management Corp. (hereinafter TMC), a Pennsylvania corporation whose sole shareholder, officer, and employee is Mr. Fonzi.

Three months after the aforementioned agreements between Bradford and Seven D. were entered into with Interstate, they were terminated by Fonzi on Interstate's behalf. It is that termination which forms the basis for this lawsuit. The plaintiffs charge in their complaint that Fonzi

did willfully, intentionally, maliciously, and wrongfully induce and cause said Interstate Motor Freight System to breach and/or terminate its said contracts with Plaintiffs, thereby wrongfully diverting and siphoning off the business from said contracts to the benefit of himself and to Defendant, Transportation Management Corp.

Complaint, Count I, ¶ 9. In the affidavit submitted by Fonzi in support of this summary judgment motion, he seeks to show that the contracts were terminated because the plaintiffs failed to adequately perform their duties pursuant to the agreements, and Interstate was being harmed by the continuing contractual relationship. These claims are controverted, however, by the affidavit submitted by plaintiff Len Dillon, successor in interest and assignee of the claim of Bradford Trucking Co. Thus, a substantial issue of fact exists between these parties, to wit, whether Fonzi had just cause to recommend to Interstate that the contracts be terminated or whether he did not have just cause and was acting solely to benefit himself and TMC, as the plaintiffs claim.

The elements of tortious interference with contractual relations are as follows:

(1) the defendants' knowledge of the contract between plaintiff and the third party, (2) defendants' unjustified inducement of the third party to breach or otherwise render impossible the performance of the contract, (3) the subsequent breach or other such act by the third party, and (4) damage to plaintiff.

Bailey v. Meister Brau, Inc., 378 F.Supp. 869 (N.D.Ill.1973). The question of whether Mr. Fonzi's actions were legally justified is the unresolved factual issue which precludes the granting of summary judgment in this case.

The question of whether an interference with contractual rights is justified is basically a question of fact which is resolved by inquiring into the `good faith' of the party inducing the breach of contract. See American Surety Co. v. Schottenbauer, 257 F.2d 6, 12-13 (8th Cir. 1958); Mellor v. Budget Advisors, Inc., 415 F.2d 1218, 1221 (7th Cir. 1969).

Bailey v. Meister Brau, Inc., 535 F.2d 982 (7th Cir. 1976). See, 26 A.L.R.2d 1227 (1952).

In Morgan v. Andrews, 107 Mich. 33, 64 N.W. 869 (1895), an action for malicious...