Specialty Container Mfg., Inc. v. Rusken Packaging, Inc.

• Decision Date: 02 November 1990
• Citation: 572 So.2d 403
• Parties: SPECIALTY CONTAINER MANUFACTURING, INC. v. RUSKEN PACKAGING, INC., et al. 89-846.
• Court: Alabama Supreme Court

Page 403

572 So.2d 403

SPECIALTY CONTAINER MANUFACTURING, INC. v. RUSKEN PACKAGING, INC., et al.

89-846.

Supreme Court of Alabama.

Nov. 2, 1990.

Michael A. Figures of Figures, Jackson and Harris, Mobile, for appellant.

M. Lloyd Roebuck of Kilborn & Roebuck and M.A. Marsal and Clifford C. Sharpe, Mobile, for appellee Merchants Transfer Co., Inc.

KENNEDY, Justice.

Specialty Container Manufacturing, Inc. ("Specialty"), filed an action against Rusken Packaging, Inc. ("Rusken"); Merchants Transfer Company, Inc. ("Merchants"); Coastal Container, Inc. ("Coastal"); Bobby Rusk; and Gregory Rusk, alleging breach of contract, misrepresentation, tortious interference with business and contractual relations, and unfair business practices; the action also sought the return of certain equipment or, alternatively, damages for the value of that equipment. Specialty originally included Southern Aluminum Casting, Inc., as a defendant in the action but later voluntarily dismissed that corporation. The trial court entered summary judgment for all of the defendants on all of Specialty's claims.

Specialty filed its action on June 9, 1988, and, accordingly, in order to defeat a properly supported summary judgment motion, it must offer substantial evidence to show a genuine issue of material fact. Ala.Code 1975, § 12-21-12; Home Bank of Guntersville v. Perpetual Federal Savings & Loan Association, 547 So.2d 840 (Ala.1989). In determining whether there is substantial evidence to defeat a summary judgment motion, this Court reviews the record in the light most favorable to the non-movant and resolves all reasonable doubts against the movant. Sanders v. Kirkland & Co., 510 So.2d 138 (Ala.1987).

The evidence, viewed in the light most favorable to Specialty, indicates that on June 9, 1986, in response to an offer by Albert Joyner, vice president of Specialty, to sell that company for $257,000, Mike Rose, who allegedly represented to representatives of Specialty that he was Rusken's general manager, and Gregory Rusk visited Specialty's offices in Mobile. Rose indicated to Joyner that he was a principal with Gregory and Bobby Rusk in Rusken. Specialty avers that before Gregory Rusk returned to Cullman on the evening of June 9, 1986, he and Rose stated that the Rusks and Rusken would buy Specialty for $200,000.

Rose remained in Mobile and visited Specialty's offices the next morning. He allegedly told Joyner and Mary Marvin Anderson, Specialty's accountant, "We have a deal." Rose proceeded to interview Specialty's employees to determine who the new owners would and would not retain. Sherwood Helms, who Specialty calls its "key sales representative," testified that during his interview Rose had indicated that Specialty had been sold and that Rose was in the process of determining who to retain and who to fire. Helms quit working for Specialty two weeks after talking to Rose. Rose interviewed many of Specialty's other workers, including Specialty's production manager, Jim Cruthirds. Rose allegedly told Cruthirds that he did not like anything he saw and that he seriously doubted that Cruthirds would continue to be employed at Specialty. Cruthirds also quit, although he eventually returned to work when the purchase did not occur.

Rose then obtained Specialty's customer lists, accounts receivable, and some of Specialty's orders and returned to Cullman. Later, he contacted Joyner to say that the Rusks and Rusken would not purchase Specialty for $200,000. On Tuesday night Rose and Gregory Rusk offered Joyner $75,000 for Specialty, and Joyner, although he testified that he considered the offer "obscene," agreed to consider it. The next morning Joyner proposed that the buyers give Specialty $50,000 cash, provide another $50,000 in 90 days if necessary, and provide a line of credit. It is unclear whether the Rusks and Rusken rejected this proposal; in any event, Joyner states that later that morning the Rusks and Rusken went back to their original offer of $200,000. Gregory Rusk told Joyner that Rose would come to Specialty the next day to complete the sale. The next day, at about 1:00 p.m., Rose called and said there was no deal. Although Specialty went out of business shortly after this breakdown of negotiations, Specialty resumed negotiations with the Rusks and Rusken, and Gregory and Bobby Rusk purchased most of Specialty's equipment for $102,500.

Specialty argues that the trial court erred by entering summary judgment on its claim that Rusken and Gregory and Bobby Rusk, individually, breached an oral contract to buy Specialty. We do not address whether the breach of contract action was barred by the Statute of Frauds; instead, we resolve Specialty's argument on other grounds. The evidence, even viewed as we have stated it here--in the light most favorable to Specialty--indicates that Specialty and the Rusks and Rusken were engaged in a series of proposals and counter-proposals, all of which ended in a temporary breakdown of negotiations. Specialty did not present substantial evidence to rebut the Rusks and Rusken's showing that there was no contract. The trial court properly entered summary judgment on that claim, and as to that claim the judgment is due to be affirmed.

Specialty contends that the trial court erred by entering summary judgment on its claim that both Rusken and Bobby and Gregory Rusk, individually, misrepresented their intentions to buy Specialty in order to obtain confidential business information about Specialty that would give them an unfair competitive advantage or superior bargaining power.

Although the parties discuss Specialty's claims in terms of all of the evidence against all of the defendants, to analyze the case properly, we initially address whether Specialty has produced sufficient evidence to establish that Rusken and Gregory Rusk and Bobby Rusk, individually are subject to Specialty's claims. Specialty's claims against Gregory Rusk, individually, are permissibly based on Gregory Rusk's activities in relation to the claims. With regard to Specialty's claims against Bobby Rusk, individually, and Rusken, Specialty's arguments indicate that the claims are based on the actions of Rose and Gregory Rusk as agents of Bobby Rusk and Rusken. The record, viewed in the light most favorable to Specialty, indicates that Rose was the general manager of Rusken. Bobby Rusk, president and principal owner of the defendant businesses, stated that he gave Gregory and Rose permission to go to Mobile on June 9. Bobby Rusk stated that he knew that Rose and Gregory were going to see Joyner, that he knew that Rose and Gregory contacted Joyner, and that he knew that Rose returned to Cullman with Specialty's accounts payable and accounts receivable. Bobby Rusk instructed Rose to contact Joyner to inform him that the Rusks and Rusken were not going to purchase the business. Considering all of this evidence, we hold that Specialty presented substantial evidence that Gregory Rusk and Rose were acting as agents of Bobby Rusk and Rusken with apparent authority to act on their behalf.

In relation to Specialty's misrepresentation claim, the evidence, viewed in the light most favorable to Specialty, indicates that Rose told both Joyner and Specialty's accountant that the Rusks and Ruskens had agreed to purchase Specialty. Rose interviewed Specialty's employees and indicated to them during those interviews that Specialty had been sold; as a consequence of those interviews, both Specialty's leading salesman and its production manager resigned. Rose obtained from Specialty its customer lists, customer orders and specifications. By June 12, 1986, Rose had visited at least three of Specialty's customers and had told them that Specialty was going out of business, that it was bankrupt, and that it could no longer deliver its products.

The Rusks and Rusken cite Duke v. Jones, 514 So.2d 981 (Ala.1987), and Dembitsky v. Gamble, 480 So.2d 1219 (Ala.1985), for the proposition that Specialty cannot maintain its misrepresentation action, both because the negotiations took place over two months' time between experienced businessmen and because one cannot recover for fraud when a business...