Sterner v. Marathon Oil Co.

• Decision Date: 08 March 1989
• Docket Number: No. C-7507,C-7507
• Citation: 767 S.W.2d 686
• Parties: 117 Lab.Cas. P 56,521, 4 IER Cases 592 James E. STERNER, Petitioner, v. MARATHON OIL COMPANY, Respondent.
• Court: Texas Supreme Court

Page 686

767 S.W.2d 686

117 Lab.Cas. P 56,521, 4 IER Cases 592

James E. STERNER, Petitioner, v. MARATHON OIL COMPANY, Respondent.

No. C-7507.

Supreme Court of Texas.

March 8, 1989.

Rehearing Denied April 12, 1989.

Gordon E. Davenport, Jr., Brown, Davenport & Apffel, Alvin, for petitioner.

Wade Williams, Fulbright & Jaworski, Carla J. Bishop & Evelyn J. Pulliam, Marathon Oil Co., Houston, for respondent.

DOGGETT, Justice.

Petitioner James Sterner sued Marathon Oil Company for tortious interference with his terminable at will employment contract. Based upon jury findings, the trial court rendered judgment in favor of Sterner. The court of appeals reversed and rendered a take nothing judgment. 745 S.W.2d 420. This appeal presents three issues: (1) whether a cause of action exists for tortious interference with a contract when employment is terminable at will, (2) who has the burden of proving whether termination was justified or excused and (3) what is the correct standard for reviewing the jury's failure to find legal justification or excuse.

In 1975, while employed by a construction company, Sterner claimed that he was injured on Marathon's premises as a result of gas inhalation. He filed suit against Marathon to recover for injuries suffered. That lawsuit was tried in 1980, some nine months prior to the events giving rise to the present lawsuit. Rejecting Marathon's defense that Sterner was not injured from gas inhalation, the jury found that Marathon was responsible for $25,000 in damages to Sterner.

In November, 1980, Marathon entered into a contract with Ford, Bacon & Davis (F, B & D) to build a hot oil treating plant at Marathon's refinery. F, B & D, an independent contractor, had been working for almost a year when the union local sent Sterner to the job. On his second day of work, Sterner became ill and was departing early. Sterner testified that as he passed by one of Marathon's safety personnel, the following conversation took place: "And he asked me what I was doing out there, and I told him, 'I am working.' And he stated to me, not if he had anything to say about it." Upon returning for work the next day, Sterner was dismissed. His payroll termination notice or "pink slip" from F, B & D gave as the sole reason, "per Marathon's directive."

At the trial for tortious interference with a contract, Marathon denied it had instructed F, B & D to fire Sterner. Rather Marathon maintained that it simply did not want Sterner working at its refinery, since he was physically unable to do the work required.

In its opinion, the court of appeals detailed Sterner's extensive medical history as reflected at his prior trial. 745 S.W.2d at 421-22. As a result of injuries received at the Marathon refinery in 1975, Sterner had testified to chest pains, difficulty breathing and climbing, dizziness and light headedness, all of which continued into 1980. However, the jury failed to find that Marathon acted with legal justification or excuse.

TORTIOUS INTERFERENCE WITH A CONTRACT TERMINABLE AT WILL

The court of appeals properly held that a cause of action exists for tortious interference with a contract of employment terminable at will. 745 S.W.2d at 422. We affirm the judgment of the court of appeals on this issue.

In support of its claim that no such cause of action exists when employment is terminable at will, Marathon cites Davis v. Alwac International, Inc., 369 S.W.2d 797 (Tex.Civ.App.--Beaumont 1963, writ ref'd n.r.e.). That case involved defendants who induced a corporation, in which they were major shareholders, to fire the plaintiff. In rejecting the employee's claim of interference, the Davis court noted the defendants' economic involvement and belief that continued employment of plaintiff was to their disadvantage. Id. at 802. Davis does not unequivocally preclude an action for tortious interference with terminable at will contracts, but rather denies recovery when the alleged wrongdoer holds a privilege to interfere based upon a superior economic interest.

Texas law protects existing as well as prospective contracts from interference. C F & I Steel Corp. v. Pete Sublett & Co., 623 S.W.2d 709, 715 (Tex.Civ.App.--Houston [1st Dist.] 1981, writ ref'd n.r.e.); Harshberger v. Reliable-Aire, Inc., 619 S.W.2d 478, 481 (Tex.Civ.App.--Corpus Christi 1981, writ dism'd w.o.j.) We have held that the unenforceability of a contract is no defense to an action for tortious interference with its performance. Clements v. Withers, 437 S.W.2d 818, 821 (Tex.1969). A promise may be a valid and subsisting contract even though it is voidable. See Restatement (Second) of Contracts § 7 (1981). Thus third persons are not free to interfere tortiously with performance of the contract before it is avoided. A similar situation exists with regard to contracts terminable at will. Until terminated, the contract is valid and subsisting, and third persons are not free to tortiously interfere with it. Restatement (Second) of Torts § 766 comment g (1979). The overwhelming majority of courts have held accordingly. W. PROSSER & W. KEETON, THE LAW OF TORTS § 129 at 995-96 (5th ed. 1984). We therefore hold that the terminable-at-will status of a contract is no defense to an action for tortious interference with its performance.

THE BURDEN OF PROVING LEGAL JUSTIFICATION OR EXCUSE

At trial, Marathon accepted the burden of proof by insisting that the trial court submit the issue of legal justification or excuse as an affirmative defense. In so doing, it apparently relied upon a substantial body of authority which supports the contention that legal justification or excuse is properly regarded as an affirmative defense. See Bellefonte Underwriters Ins. Co. v. Brown, 663 S.W.2d 562, 573 (Tex.App.--Houston [14th Dist.] 1983), rev'd on other grounds, 704 S.W.2d 742 (Tex.1986); Armendariz v. Mora, 553 S.W.2d 400, 405 (Tex.Civ.App.--El Paso 1977, writ ref'd n.r.e.); Tippett v. Hart, 497 S.W.2d 606, 613 (Tex.Civ.App.--Amarillo), writ ref'd n.r.e., 501 S.W.2d 874 (Tex.1973); 45 Am.Jur.2d, Interference § 27 (1969).

Many of our sister states hold that a claim of legal justification or excuse in the interference of contractual relations is an affirmative defense upon which the defendant has the burden of proof. Alyeska Pipeline Serv. Co. v. Aurora Air Serv. Inc., 604 P.2d 1090, 1095 (Alaska 1979); Chanay v. Chittenden, 115 Ariz. 32, 563 P.2d 287, 292 (1977); Herron v. State Farm Mut. Ins. Co., 56 Cal.2d 202, 14 Cal.Rptr. 294, 296, 363 P.2d 310, 312 (1961); Owen v. Williams, 322 Mass. 356, 77 N.E.2d 318, 321 (1948); Wilkinson v. Powe, 300 Mich. 275, 1 N.W.2d 539, 542 (1942); Bennett v. Storz Broadcasting Co., 270 Minn. 525, 134 N.W.2d 892, 901 (1965); Smith Dev. Corp. v. Bilow Enter. Inc., 112 R.I. 203, 308 A.2d 477, 482 (1973); Duggin v. Adams, 234 Va. 221, 360 S.E.2d 832, 838 (1987); Mitchell v. Aldrich, 122 Vt. 19, 163 A.2d 833, 836 (1960); Scymanski v. Dufault, 80 Wash.2d 77, 491 P.2d 1050, 1056 (1971); see also Forro Precision, Inc. v. I.B.M. Corp., 673 F.2d 1045, 1053 n. 3 (9th Cir.1982), cert. denied, 471 U.S. 1130, 105 S.Ct. 2664, 86 L.Ed.2d 280 (1985); Israel v. Wood Dolson Co., 1 N.Y.2d 116, 134 N.E.2d 97, 151 N.Y.S.2d 1 (1956). This is because legal justification or excuse is treated as a type of privilege. The party asserting this privilege does not deny the interference but rather seeks to avoid liability based upon a claimed interest that is being impaired or destroyed by the plaintiff's contract. Such defenses, which constitute a confession and avoidance, are affirmative in nature. TEX.R.CIV.P. 94. Therefore, we conclude that the privilege of legal justification or excuse in the interference of contractual relations is an affirmative defense upon which the defendant has the burden of proof.

In Sakowitz, Inc. v. Steck, 669 S.W.2d 105, 107 (Tex.1984), this court was divided on this same issue. A majority believed that lack of justification or excuse should be viewed as an element of the plaintiff's right of recovery, while the dissent viewed it as an affirmative defense. Upon further reflection, we hold that this issue should be treated as an affirmative defense, as both parties in the instant case agreed during oral argument. To the extent that they are in conflict with this opinion, we overrule Sakowitz, 669 S.W.2d at 107, and Black Lake Pipe Line Co. v. Union Construction Co., 538 S.W.2d 80, 91 (Tex.1976), and disapprove of those decisions of the courts of appeals placing the burden upon the plaintiff. See e.g., Rural Dev. Inc. v. Stone, 700 S.W.2d 661, 666-67 (Tex.App.--Corpus Christi 1985, writ ref'd n.r.e.); Terry v. Zachry, 272 S.W.2d 157, 159 (Tex.Civ.App.--San Antonio 1954, writ ref'd n.r.e.).

STANDARD FOR REVIEWING LEGAL JUSTIFICATION OR EXCUSE

After undertaking the burden of proving its privilege to interfere in the contract between Sterner and F, B & D, Marathon failed to obtain an affirmative jury finding. By point of error to the court...