St. John's River Water Mgmt. Dist. v. FERNBERG GEOL. SERV. INC.

• Decision Date: 12 April 2001
• Docket Number: No. 5D00-1100.,5D00-1100.
• Citation: 784 So.2d 500
• Parties: ST. JOHNS RIVER WATER MANAGEMENT DISTRICT, Appellant/Cross-Appellee, v. FERNBERG GEOLOGICAL SERVICES, INC., Appellee/Cross-Appellant.
• Court: Florida District Court of Appeals

784 So.2d 500

ST. JOHNS RIVER WATER MANAGEMENT DISTRICT, Appellant/Cross-Appellee, v. FERNBERG GEOLOGICAL SERVICES, INC., Appellee/Cross-Appellant.

No. 5D00-1100.

District Court of Appeal of Florida, Fifth District.

April 12, 2001.

Rehearing Denied May 5, 2001.

William H. Congdon, Palatka, for Appellant/Cross-Appellee.

Daniel J. Webster of Daniel J. Webster, P.A., Daytona Beach, for Appellee/Cross-Appellant.

SAWAYA, J.

St. Johns River Water Management District [St. Johns] appeals the final judgment in favor of Fernberg Geological Services, Inc. [FGS] in the suit filed by FGS alleging St. Johns had tortiously interfered with FGS's business relationship with the Volusia City County Water Supply Co-op [Co-op]. St. Johns argues that its motions for directed verdict should have been granted because there was no competent substantial evidence to establish the essential element of causation or that the relationship between FGS and the Co-op would in all probability have continued had St. Johns not interfered. We agree and reverse.¹

The Co-op was composed of Volusia County and the cities of Ormond Beach, Holly Hill, Daytona Beach, Port Orange, New Smyrna Beach, and Edgewater.² Historically, each city had individually obtained its consumptive use permit [CUP] from St. Johns. The CUP process can take several years and cost up to several hundred thousand dollars. Because of the proximity of the cities, the cities' monitoring wells were duplicative. In 1993, the members of the Co-op became interested in consolidating their individual efforts and obtaining a single CUP covering their collective area. This would represent a substantial savings to the member cities and would alleviate the concerns voiced by the owner of the land on which a number of the monitoring wells were located. The Co-op hired FGS to develop what they labeled a "Consumptive Use Permit Compliance Program." It was agreed that the cities of Ormond Beach, Holly Hill, and Daytona Beach would be the "test" group.

The contract between the Co-op and FGS contemplated four phases, each to be "fleshed out" and funded separately. Funding of each phase was required to be by unanimous vote of each city. FGS completed and was paid for Phase I. FGS anticipated continuing under the contract to perform the next three phases of the contract; however, problems arose in early 1995. The phases were contingent on funding by each city and Ormond Beach and Daytona Beach had not committed to funding any phases past Phase I. Ormond Beach thought the FGS contract was too expensive and Daytona Beach had its own consultant and had thus postponed any decision until October of 1995. In the spring of 1995, neither city had agreed to proceed with the additional phases of the contract. The Co-op came up with the idea of requesting that $125,000 of the funds that St. Johns had budgeted to give to the Co-op be used to partially fund the contract. The Co-op never asked St. Johns to step in and prepare the program; the Co-op asked only that St. Johns provide the money to pay FGS to develop the program.

In February 1995, Richard Fernberg, the geologist behind FGS, met with St. Johns to give a summary of the compliance plan, present FGS's report on Phase I, and summarize FGS's proposed efforts under Phases II and III. He described St. Johns as being "very receptive" to his ideas. The Co-op made a request for funding by St. Johns, seeking permission to use the $125,000 to pay FGS to develop the program. Initially, St. Johns agreed to support the pilot program. However, in March, the Co-op received a letter stating that St. Johns was considering development of a wellfield monitoring plan "in house." St. Johns's proposal encompassed only a portion of the work proposed by the multi-phase contract. St. Johns knew that FGS had a business relationship with the Co-op when St. Johns made its offer. It believed, however, that the FGS contract had not been funded by the Co-op's member cities and was "dead."

In March 1995, Barbara Vergara, Director of the Division of Water Supply with St. Johns, spoke at a Co-op meeting and explained that St. Johns wanted the opportunity to develop a cooperative compliance program "in house" so as to better understand the challenge of creating a single plan and gain the ability to apply the knowledge to others. St. Johns would develop the wellfield monitoring program at no cost to the Co-op. Richard Fernberg objected at the meeting, asserting that FGS already had a contract with the Coop. The Co-op voted to accept St. Johns's offer and had no further relationship with FGS. The director of the Co-op, Mr. Feastor, testified that the Co-op would have continued using FGS if St. Johns had not offered its services for free, with the caveat that it would have done so as long as money was available to perform under the contract.

Mr. Fernberg wrote to St. Johns and strenuously objected to St. Johns's act of taking work away from FGS. Henry Dean, Executive Director of St. Johns, responded with an indignant letter stating that Mr. Fernberg's allegations were "inaccurate and highly misleading." Mr. Fernberg spent two months trying to get the project back from St. Johns. At one point, St. Johns offered FGS $20,000 to act as a consultant on the project in order to settle the dispute. FGS rejected the offer and filed the instant suit alleging that St. Johns had interfered with its advantageous business relationship.³ The court denied St. Johns's motion for a directed verdict on the claim. The jury found in favor of FGS and awarded it $603,633, which amount was reduced by a remittitur order to $549,080. As explained seriatim, we conclude that the motion for directed verdict should have been granted and thus reverse for entry of judgment in favor of St. Johns.

"A motion for directed verdict should be granted when there is no reasonable evidence upon which a jury could legally predicate a verdict in favor of the nonmoving party." Cecile Resort, Ltd. v. Hokanson, 729 So.2d 446, 447 (Fla. 5th DCA 1999). An appellate court, in reviewing a trial court's order on a motion for directed verdict, "is required to evaluate the testimony in the light most favorable to the plaintiff and every reasonable inference deduced from the evidence must be indulged in the plaintiff's favor." Id. (citing American Motors Corp. v. Ellis, 403 So.2d 459, 467 (Fla. 5th DCA 1981), review denied, 415 So.2d 1359 (Fla.1982)). Having reviewed this case with this standard firmly in mind, we conclude that FGS simply failed to prove the elements of its cause of action.

The elements of a cause of action based on tortious interference with a business relationship are (1) the existence of a business relationship; (2) the defendant's knowledge of the relationship; (3) the defendant's intentional and unjustified interference with the relationship; and (4) damage to the plaintiff as a result of the breach of the relationship. Ethan Allen, Inc. v. Georgetown Manor, Inc., 647 So.2d 812 (Fla.1994) (citing Tamiami Trail Tours, Inc. v. Cotton, 463 So.2d 1126, 1127 (Fla.1985)).

A protected business relationship need not be evidenced by an enforceable contract. Id. However, "the alleged business relationship must afford the plaintiff existing or prospective legal or contractual rights." Register v. Pierce, 530 So.2d 990, 993 (Fla. 1st DCA), review denied, 537 So.2d 569 (Fla.1988). The court in Ethan Allen further stated that "[a]s a general rule, an action for tortious interference with a business relationship requires a business relationship evidenced by an actual and identifiable understanding or agreement which in all probability would have been completed if the defendant had not interfered." 647 So.2d at 815.

As with most other torts, embedded within the essential elements of the tort of intentional interference with a business relationship...