Southern Exposition Management Co. v. University Auto Sales, Inc.

• Decision Date: 04 December 1998
• Parties: SOUTHERN EXPOSITION MANAGEMENT COMPANY d/b/a Semco v. UNIVERSITY AUTO SALES, INC., d/b/a University Marine & Sailing Center.
• Court: Alabama Supreme Court

740 So.2d 992

SOUTHERN EXPOSITION MANAGEMENT COMPANY d/b/a Semco v. UNIVERSITY AUTO SALES, INC., d/b/a University Marine & Sailing Center.

1970511.

Supreme Court of Alabama.

December 4, 1998.

Rehearing Denied August 27, 1999.

Jack E. Held and Sandra L. Vinik of Sirote & Permutt, P.C., Birmingham, for appellant.

Dennis G. Pantazis and Brian M. Clark of Gordon, Silberman, Wiggins & Childs, P.C., Birmingham, for appellee.

SEE, Justice.

University Auto Sales, Inc., d/b/a University Marine & Sailing Center ("University Marine") contracted with Southern Exposition Management Company ("Southern Exposition") to display boats at a boat show in Atlanta, Georgia. After difficulties arose from the boat show, University Marine sued Southern Exposition, alleging, among other things, breach of contract, fraud, and tortious interference with business and/or contractual relations. A jury awarded University Marine $150,000 in compensatory damages on the breach-of-contract claim, $225,000 in punitive damages on the fraud claim, and $225,000 in punitive damages on the tortious-interference claims. We conclude that the trial court erred in denying Southern Exposition's motion for a directed verdict on the breach-of-contract claim and erred in entering a judgment based on the punitive-damages awards on the fraud and tortious-interference claims in the absence of compensatory damages awards on those claims. Accordingly, we reverse and render a judgment for Southern Exposition on both the contract claim and the tort claims.

I.

In January 1992, Jack Davis, the sole owner of University Marine, telephoned Carol Nix, an assistant manager for Southern Exposition, to inquire about reserving space to exhibit recreational boats at a boat show to be held in Atlanta in March. Nix sent Davis a "Space Application and License Agreement" (the "Original Contract") relating to the show. The Original Contract provided for the amount of floor space that Davis had requested. The Original Contract provided blank spaces in which the applicant could list the types of boats he wished to display at the boat show. Davis listed Windsor Craft, Electra Craft, and Excel boats. Davis then signed and dated the Original Contract and returned it to Southern Exposition.

In late February or early March 1992, Davis again called Nix to discuss purchasing additional space at the boat show. Davis alleges that Nix told him that no one was listed as a Wellcraft dealer at the boat show and that he could also bring Wellcraft boats. Nix mailed an amendment to the Original Contract (the "Amendment") to Davis. The Amendment expressly provided for University Marine's lease of additional space, but it did not state that Davis could bring Wellcraft boats to the boat show.

Approximately one week before the boat show, which was scheduled for late March 1992, Genmar Industries, Inc. ("Genmar"), the manufacturer of Wellcraft boats, appointed a company known as "JOA" to exhibit Wellcraft boats at the show. Davis, who was unaware of the JOA appointment, brought Windsor Craft, Electra Craft, Excel, and Wellcraft boats to the Atlanta boat show. Davis set up his boats in the space he had leased under the Original Contract and the Amendment.

Before the show opened, Kevin Mahoney, Genmar's southeastern sales representative, saw University Marine's exhibit. He told Davis that University Marine was not authorized to exhibit Wellcraft boats and that the boats would have to be removed. On the third day of the boat show, employees of Southern Exposition removed Davis's Wellcraft boats from his display and put them in a storage area.

University Marine filed this action against Southern Exposition and Genmar, claiming, among other things, breach of contract, fraud, and tortious interference with business and/or contractual relations. Before trial, Davis settled his claims against Genmar. The trial court denied Southern Exposition's motion for a directed verdict on all claims. The jury returned a verdict for University Marine on all claims, awarding $150,000 in compensatory damages on the breach-of-contract claim, $-0- in compensatory damages and $225,000 in punitive damages on the fraud claim, and $-0- in compensatory damages and $225,000 in punitive damages on the claim alleging tortious interference with business and/or contractual relations. The trial court entered a judgment on that verdict. Southern Exposition appealed.

II.

Prior to this appeal, the parties agreed that the substantive law of the State of Georgia applies to this case, and the trial court so ruled. Because neither party appeals this ruling of the trial court, Georgia law is the law of the case. Big B, Inc. v. Cottingham, 634 So.2d 999, 1002 (Ala.1993) (stating that where a trial court's ruling is not appealed, it becomes the law of the case).¹

A. Breach of Contract

Southern Exposition contends that the trial court erred in denying its motion for a directed verdict on the breach-of-contract claim because, it says, University Marine's evidence of the contract term that was allegedly breached is made inadmissible by the parol evidence rule. Specifically, Southern Exposition contends that the only evidence of the particular term of the contract that it allegedly breached—that University Marine could display Wellcraft boats at the Atlanta boat show—was Davis's testimony regarding an alleged oral modification of the Original Contract, a modification that is not reflected in the written Amendment. Thus, Southern Exposition contends, because the alleged oral modification was not included in the Amendment to the Original Contract, the parol evidence rule bars University Marine's attempt to alter the terms of the unambiguous Amendment.

University Marine responds by arguing that the parol evidence rule does not bar the introduction of the alleged oral modification allowing University Marine to display Wellcraft boats at the boat show because, it says, the Original Contract as amended was ambiguous. Further, University Marine contends that the parol evidence rule does not bar evidence of the alleged oral modification offered to amplify the Amendment because, it says, the Amendment was fraudulently induced.

In reviewing a trial court's denial of a defendant's motion for a directed verdict, we must determine whether the plaintiff presented substantial evidence in support of his claim. Hosea O. Weaver & Sons, Inc. v. Towner, 663 So.2d 892, 894 (Ala.1995).² To support a breach-of-contract claim, a plaintiff must show the existence of a contract, the defendant's breach of a specific term of that contract, and damage resulting from that breach. Graham Bros. Constr. Co. v. Matthews Contracting Co., 159 Ga.App. 546, 550, 284 S.E.2d 282, 286 (1981). A plaintiff may not support his claim with evidence that is barred by the parol evidence rule. See Schluter v. Perrie, Buker, Stagg & Jones, P.C., 230 Ga.App. 776, 776, 498 S.E.2d 543, 545 (1998) (stating that where a contract is unambiguous, parol evidence is inadmissible).

Georgia courts have stated the parol evidence rule as follows:

"[A] prior or contemporaneous parol agreement, which contradicts, varies, or otherwise modifies a written agreement between the same parties and pertaining to the same subject-matter, is merged into the written agreement; and ... where the parties have reduced to writing what appears to be a complete and certain agreement, it will, in the absence of fraud, be conclusively presumed that the writing contains the entire contract."

Indiana Truck Corp. v. Glock, 46 Ga.App. 519, 519-20, 168 S.E. 124, 125 (1933). The parol evidence rule applies not only to original agreements, but also to written amendments to the original agreements. See, e.g., United Artists Communications, Inc. v. Corporate Property Investors, 410 N.W.2d 39, 42 (Minn.Ct.App.1987) (holding that considering evidence of an alleged oral modification of a lease would violate the parol evidence rule where the evidence contradicts or varies the terms of a written modification); Rubey v. Wood, 15 Utah 2d 312, 392 P.2d 485 (1964) (holding that a contract for the sale of land and a written modification of that contract were not so ambiguous and uncertain that it was necessary to take parol evidence to determine the meaning of their provisions).

The specific issue here is whether a term of the contract gave University Marine the right to display Wellcraft boats at the Atlanta boat show. No such term appears in either the Original Contract or the Amendment. The Original Contract states in pertinent part:

"LIST PRODUCTS/LINES TO BE EXHIBITED:

(Only those listed here will be allowed to be displayed.)

"Windsor Craft Electra Craft Excel."

The Amendment provides in pertinent part:

"SEMCO Productions, of 1130 Hightower Trail, Atlanta, GA 30350 and the undersigned Exhibitor agree to modify as listed below the existing Space Application and License Agreement for the above show as follows:

"WINDSOR BOATS/UNIVERSITY MARINE has expanded their exhibit space # P-15 from a 20' × 42' area to an additional 42' × 30' area. Total cost due for additional square footage is $3,528.00. In the event of any conflict or inconsistency between the provisions contained in this Modification Agreement and said original Space Application and License Agreement, this modification shall control in all respects."

(Emphasis added.) Davis admitted that the alleged oral modification regarding his right to display Wellcraft boats was reached in the same telephone call to Nix that generated the Amendment.

On its face, the Original Contract, taken with the Amendment, is not ambiguous. The Amendment does not purport to alter or vary that term of the Original Contract that clearly restricts the types of boats University Marine could display. The alleged oral modification that would allow University Marine to display Wellcraft boats was "between the same parties and pertaining to the same subject-matter, [and, thus,] is merged into...