Southwestern Bell Telephone Co. v. John Carlo Texas, Inc.

• Decision Date: 03 July 1991
• Docket Number: No. C14-89-01062-CV,C14-89-01062-CV
• Citation: 813 S.W.2d 613
• Parties: SOUTHWESTERN BELL TELEPHONE COMPANY, Appellant, v. JOHN CARLO TEXAS, INC., Appellee. (14th Dist.)
• Court: Texas Court of Appeals

Page 613

813 S.W.2d 613

SOUTHWESTERN BELL TELEPHONE COMPANY, Appellant, v. JOHN CARLO TEXAS, INC., Appellee.

No. C14-89-01062-CV.

Court of Appeals of Texas Houston (14th Dist.).

July 3, 1991.

Rehearing overruled July 3, 1991.

Joervin Henderson, Ronald E. Cook, Richard Keeton, Houston, for appellant.

Patricia L. Hayden, H. Victor Thomas, Houston, for appellee.

Before PAUL PRESSLER, CANNON and ELLIS, JJ.

OPINION

ELLIS, Justice.

Southwestern Bell Telephone Company appeals from a judgment awarding John Carlo Texas, Inc. actual and punitive damages based on the jury's finding of tortious interference with contract. In our opinion of March 21, 1991, we reversed the trial court's judgment as to punitive damages and rendered judgment that appellee take nothing as to its punitive damage claim. As modified, we affirmed the trial court's judgment. Upon motion for rehearing, we withdraw our original opinion and substitute the following opinion.

John Carlo Texas, Inc. (John Carlo) sued the City of Houston (the City) and Southwestern Bell Telephone Company (SWB) to recover damages resulting from delays in John Carlo's performance of a contract with the City for the widening of Fountainview Drive between Westheimer Road and Highway 59. John Carlo alleged that the City breached the contract and that SWB tortiously interfered with the contract between John Carlo and the City by failing to relocate its telephone poles and cables in a timely manner. A take nothing judgment was entered as to the City, but John Carlo recovered $171,155.80 in actual damages and $500,000.00 in punitive damages from SWB.

In point of error one, SWB claims it owed no duty to John Carlo to relocate telecommunication facilities. In point of error two, SWB claims that its conduct was justified. In its supplemental reply filed after submission of this case, appellee argues that SWB failed to preserve these complaints for review. We agree.

Neither SWB's trial brief nor its motion for judgment n.o.v. raised the argument of "no duty" in relation to the tortious interference claim. To preserve a complaint for appellate review, a party must present to the trial court a "timely request, objection or motion, stating the specific grounds for the ruling he desired the court to make...." TEX.R.APP.P. 52. Because SWB did not present the specific ground asserted in point one, SWB waived the right to assert this complaint on appeal. We overrule point one.

In its trial brief, SWB raised the claim that its actions were justified as a matter of law. SWB did not specifically raise this argument in its motion for judgment n.o.v., although it did state:

Further, and in addition, Defendant, for the reasons set forth in Defendant's Trial Brief, as a matter of law, JCT [appellee], on the facts of the record, has failed to establish a cause of action against Defendant SWB for intentional interference with contract.

Because SWB incorporated into its motion for judgment n.o.v. the arguments raised in its trial brief, we will address the claim that its actions were justified as a matter of law.

The elements of a claim of contractual interference are: (1) a contract subject to interference, (2) willful and intentional interference, (3) the intentional interference was the proximate cause of plaintiff's damages, and (4) the plaintiff suffered actual damages. See Champion v. Wright, 740 S.W.2d 848, 853 (Tex.App.--San Antonio 1987, writ denied); Unitel Corp. v. Decker, 731 S.W.2d 636, 641 (Tex.App.--Houston [14th Dist.] 1987, no writ). One is legally justified in interfering with the contract of another "(1) if it is done in a bona fide exercise of his own rights or (2) if he has an equal or superior right in the subject matter to that of the other party." Sterner v. Marathon Oil Co., 767 S.W.2d 686, 691 (Tex.1989). The privilege of legal justification to interfere with contractual relations is an affirmative defense upon which the defendant has the burden of proof. Id. at 690.

The defense of justification was not presented to the jury in a separate question. Rather, the jury answered "We do" to the following question:

QUESTION NO. 4

Do you find from a preponderance of the evidence that Bell knowingly and intentionally failed, without justification to timely relocate its facilities in connection with the Fountainview project?

In considering SWB's "matter of law" challenge, we must examine the record for any evidence supporting the jury's finding, disregarding all evidence contrary to the finding. Sterner, 767 S.W.2d at 690. If we find no evidence supporting the jury's finding, we must examine the entire record to determine if the contrary proposition was established as a matter of law. Id.

SWB claims the evidence established that any interference was justified because it was done in the bona fide exercise of its own rights under its contract with the City and its statutory obligation to maintain uninterrupted service to its customers. Because the jury found that SWB's interference was without justification, we must disregard all evidence showing that the interference was justified and determine if any remaining evidence supports the jury's finding. The evidence shows that the City had passed an ordinance, ordinance number 69-639 or the "Gross Receipts Ordinance," regarding the City's ability to regulate SWB. In particular, Section 14 of this ordinance states:

The Telephone company shall, upon the written request of the City, relocate its facilities situated within any street at no expense to the City where reasonable and necessary to accommodate street widening or improvement projects of the City.

Before entering the contract with John Carlo, the City notified SWB about the Fountainview Road project and asked SWB to advise the City when it would move the utilities in the right of way. In January 1984, the City advised SWB that appellee's project commencement date was in April 1984. Testimony indicated that Houston Lighting & Power had moved all of its lines without interfering with appellee's schedule. By June 1984, however, SWB had not relocated any of its cables on Fountainview. SWB's representative, Fred Guy, testified that he knew the failure to move the aerial cables could interfere with appellee's work.

SWB had planned to construct an underground conduit system in the Fountainview area. Because SWB estimated that construction of this conduit would not be complete until August 1984, SWB had to relocate its cables temporarily from the old poles to new poles located out of the road construction area. Guy admitted that, at the time, he thought this interim step of moving cables to new poles was a waste of money.

Appellee's representatives testified that they contacted SWB numerous times about relocating the cables and complained that the failure to relocate the cables was interfering with appellee's efforts. Rather than moving all of the cables at once, SWB moved the cables in sections as appellee's work reached that section of the road. Appellee's expert concluded that SWB's failure to relocate the cables in a timely fashion resulted in 51 days of delay and 12 days of inefficient work on the project. We find that this is some evidence that SWB's interference was not done in the bona fide exercise of its own rights. We overrule point two.

In point of error three, SWB claims the trial court erred in rendering judgment for appellee because only an affirmative act, and not an omission or failure to act, can form the basis for a claim of contractual interference. In support of this proposition, SWB cites Aramco Serv. Co. v. Redland Fabricating & Welding, Inc., 752 S.W.2d 184 (Tex.App.--Houston [14th Dist.] 1988), modified, No. C-7785, 1989 WL 62253 (Tex.1989) (not designated for publication) ¹; Frost Nat'l Bank v. Matthews, 713 S.W.2d 365 (Tex.App.--Texarkana 1986, writ ref'd n.r.e.), and CF & I Steel Corp. v. Pete Sublett & Co., 623 S.W.2d 709 (Tex.Civ.App.--Houston [1st Dist.] 1981, writ ref'd n.r.e.). SWB misinterprets the holdings in these cases.

In Aramco, the court held that Aramco's act of accepting delivery of goods was not evidence of an intentional or willful act of contractual interference. Aramco Serv. Co., 752 S.W.2d at 188. Rather than finding acceptance of goods to constitute an omission or a failure to act, the Aramco court found that it was not an intentional or willful act as required to establish contractual interference. See id. Thus, Aramco does not stand for the proposition that an act, rather than an omission, is required to show interference with contract.

In Matthews, Frost National Bank had obtained, through foreclosure, the working interest in an oil, gas, and mineral lease. Matthews, 713 S.W.2d at 367. Matthews filed suit against the bank seeking a declaratory judgment that the lease had terminated. Id. The bank filed a cross-claim against an intervenor in the suit for tortious interference with contract. Id. Finding that the intervenor's purpose in intervening in the suit was to uphold the lease, rather than to terminate it, the court found no evidence that Gauntt committed an act wrongfully interfering with the lease. Id. at 369.

In CF & I Steel Corp., the defendant was a distributor of CF & I oil field pipe. CF & I Steel Corp., 623 S.W.2d at 711. Mitchell Energy Company, through its subsidiary Butler Drilling, had ordered pipe from the distributor, who in turn had ordered the pipe from CF & I. CF & I refused to deliver the pipe unless the distributor paid for the order in advance and in cash. Id. at 714. Mitchell would not pay the distributor for the order in advance and cancelled the order, eventually procuring this pipe through another distributor. Id. CF & I later brought suit against the distributor for non-payment of notes and to enforce a guaranty agreement. Id. at 712. The distributor filed a cross-claim asserting that CF & I had tortiously interfered with the distributor's contract with Mitchell. Id. at 711, 713....