Verkin v. Melroy, 82-2001
| Decision Date | 07 March 1983 |
| Docket Number | No. 82-2001,82-2001 |
| Citation | 699 F.2d 729 |
| Parties | William Paul VERKIN and Tibor W. Weston, Plaintiffs-Appellants, v. Jack G. MELROY, individually, Edward Nissan, individually, Salem Square VIII, Ltd., a Limited Partnership, and Melroy, Nissan and Company, a corporation, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Olney G. Wallis, Houston, Tex., for plaintiffs-appellants.
Joseph S. Cohen, Joe C. Holzer, Houston, Tex., for defendants-appellees.
Appeal from the United States District Court for the Southern District of Texas.
Before BROWN, GOLDBERG and HIGGINBOTHAM, Circuit Judges.
This is an appeal in a diversity suit for tortious interference with a prospective contractual relationship. Although the jury returned a verdict for the plaintiffs, the judge entered a judgment notwithstanding the verdict for the defendants, from which the plaintiffs now appeal. Finding sufficient evidence to support the jury verdict, we reverse.
In late 1977 and 1978, plaintiff Verkin, a Houston real estate broker, discussed with Banfield the possibility of Verkin's acting as Banfield's broker in the sale of the Salem Square Apartments in Friendswood, Texas. Banfield advised Verkin that the selling price was $2,552,835 and that he would pay Verkin a commission of $100,000 if Verkin could find a buyer. Banfield provided Verkin with various documents regarding Salem Square; Verkin removed all identification of the seller from the documents and incorporated them into a sales package with Verkin's name on it. Verkin provided this information to several prospective buyers.
Verkin also provided the package to co-plaintiff Weston, another Houston broker. Verkin and Weston agreed that if Weston could find a buyer, Verkin and Weston would split the $100,000 commission. Weston reproduced the sales package on Weston Realty paper.
Around late February, 1978, Bolin, another Houston broker, contacted Weston and advised him that she had a potential client interested in properties such as Salem Square. Weston advised Bolin that he was co-brokering the property with another broker and that the two of them were to Bolin's potential client was defendant Melroy, a San Diego broker, who was doing business with defendant Nissan as a California corporation, defendant Melroy, Nissan and Company. Bolin advised Melroy that two other brokers were working for the seller and would receive a $100,000 commission; Melroy responded that she could add another $100,000 to the price to the defendant corporation and that Bolin and Melroy (in his capacity as broker) could split the additional $100,000 as their commission.
receive a $100,000 commission from the seller; he advised Bolin that she should look to the buyer for her commission. Weston gave Bolin a copy of the sales package; apparently someone in Bolin's office "whited out" the Weston Realty identifying marks on the package.
In spite of the fact that Melroy was advised that the asking price was firm, Melroy directed Bolin to submit a bid of $2,400,000, some $152,000 below the asking price. Weston and Verkin had already arranged a meeting with seller Banfield, so they delivered the offer without any expectation that it would be accepted. Weston had removed Bolin's name from the offer; apparently Banfield did not notice or forgot seeing Melroy's name on the offer and forgot Weston's presence at the meeting. Banfield, as expected, rejected the offer immediately. Melroy was advised that his offer was rejected. Banfield briefly took the property off the market and then advised Verkin that he had raised the price to $2,950,000, including a $300,000 increase and the $100,000 commission.
During the next two months both Verkin and Weston worked hard at selling the property and found several prospective buyers. Around May 1, 1978, Melroy contacted Bolin and told her that he would be in Houston and wanted to meet with the owner of the property. Bolin called Weston and asked him about the possibility of her arranging a meeting; Weston, believing Bolin would attend the meeting, gave Banfield's name and phone number to Bolin. Bolin contacted Banfield, who told her that the $2,950,000 price, including the $100,000 commission was firm, and agreed to the meeting. Banfield then called Verkin and asked if he knew Bolin; Verkin said that he did not know her.
Bolin then gave Banfield's name and number to Melroy; Melroy called Banfield and said that he had previously submitted an offer on the property. Because Banfield did not remember Melroy's name appearing in the offer and was unaware of the connection between Bolin and Verkin, Banfield denied that he had ever received such an offer. The next day Banfield and one of his associates, Hauser, met with Melroy. Despite Bolin's request to attend the meeting, she was excluded. At the meeting Banfield reiterated that he had not seen Melroy's previous offer. Melroy testified that at that point he showed Banfield a copy of the offer. Banfield and Hauser testified that Melroy did not show them a copy of the offer.
During the meeting Melroy did not ask Banfield about any arrangements with brokers. Banfield told Melroy that the selling price was $2,950,000, which included a $100,000 commission. Melroy and Banfield then agreed that Banfield would lower the price by $100,000 in exchange for Melroy taking care of any commission.
After the meeting, Melroy went to Bolin, accused her of failing to present his offer, and told her that her work was deserving of a $5,000 finder's fee at most. The following week Bolin saw Weston at a party, where she accused him of failing to present Melroy's original offer to Banfield. Prior to Bolin's announcement, Weston did not know that Melroy had negotiated a sale from Banfield.
Verkin and Weston subsequently met with Banfield and explained the situation to him. Banfield explained that the price had been reduced by $100,000 based on Melroy's agreement to take care of the commission and suggested that they look to Melroy for payment. Verkin and Weston wrote Melroy demanding payment. Melroy made no response and this litigation followed.
Verkin and Weston sued the defendants in federal court under diversity jurisdiction for tortious interference with a prospective contractual relationship. This Texas cause of action was discussed by this Court in Leonard Duckworth, Inc. v. Michael L. Field and Co., 516 F.2d 952 (5th Cir.1975). The Court there stated that to recover on this cause of action, the plaintiff must show that:
(1) there was a "reasonable probability" that he would have entered into a contractual relationship; (2) defendant acted maliciously by intentionally preventing the relationship from occurring with the purpose of harming plaintiff; (3) the defendant was not privileged or justified; and (4) actual harm or damage occurred as a result.
The jury found for the plaintiffs on four special interrogatories based on the four elements of Leonard Duckworth. The trial court, on defendants' motion for judgment notwithstanding the verdict, found that the evidence did not support the jury's finding on the first two elements of Leonard Duckworth and entered a judgment for the defendants. The plaintiffs now appeal, arguing that there was evidence to support the jury's findings. We agree.
In this circuit we are guided in our review of a jury verdict by the standard of Boeing Co. v. Shipman, 411 F.2d 365, 374-75 (5th Cir.1969) (en banc).
On motions for directed verdict and for judgment notwithstanding the verdict the Court should consider all of the evidence--not just that evidence which supports the non-mover's case--but in the light and with all reasonable inferences most favorable to the party opposed to the motion. If the facts and inferences point so strongly and overwhelmingly in favor of one party that the Court believes that reasonable men could not arrive at a contrary verdict, granting of the motions is proper. On the other hand, if there is substantial evidence opposed to the motions, that is, evidence of such quality and weight that reasonable and fair-minded men in the exercise of impartial judgment might reach different conclusions, the motions should be denied, and the case submitted to the jury. A mere scintilla of evidence is insufficient to present a question for the jury. The motions for directed...
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