Wardlaw v. Inland Container Corp.

• Decision Date: 13 March 1996
• Docket Number: No. 94-10948,94-10948
• Citation: 76 F.3d 1372
• Parties: 11 IER Cases 873 Dudley WARDLAW, Plaintiff-Appellee-Cross-Appellant, v. INLAND CONTAINER CORPORATION, et al., Defendants, Anheuser-Busch, Inc., Defendant-Appellant-Cross-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1372

76 F.3d 1372

11 IER Cases 873

Dudley WARDLAW, Plaintiff-Appellee-Cross-Appellant, v. INLAND CONTAINER CORPORATION, et al., Defendants Anheuser-Busch, Inc., Defendant-Appellant-Cross-Appellee.

No. 94-10948.

United States Court of Appeals Fifth Circuit.

March 13, 1996.

Ronald Manthey, Laurie Jones, and Julie S. Brunett, Littler Mendelson Fastiff, Tichy & Mathiason, Dallas, TX, for appellant.

Hal K. Gillespie, David K. Watsky, Dale M. Rodriguez, and Liane A. Janovsky, Gillespie Rozen & Tanner, Dallas, TX, for appellee.

Appeals from the United States District Court for the Northern District of Texas.

Before HIGGINBOTHAM, EMILIO M. GARZA and BENAVIDES, Circuit Judges.

BENAVIDES, Circuit Judge:

Defendant-appellant/cross-appellee Anheuser-Busch ("Anheuser") appeals from a jury verdict awarding plaintiff-appellee/cross-appellant Dudley Wardlaw ("Wardlaw") damages for tortious interference with his employment. Wardlaw cross-appeals, arguing that the district court erred in granting Anheuser judgment as a matter of law on the issue of punitive damages. We reverse the district court's denial of Anheuser's motion for judgment as a matter of law, and affirm its judgment on the issue of punitive damages.

I. Background

Wardlaw was employed as a National Account Service Executive for Inland Container Corp. ("Inland"), which manufactures corrugated paper products. Anheuser was one of Inland's customers. Wardlaw successfully developed a quality and service program for Anheuser. As a result of his work on the Anheuser account, Wardlaw had access to information regarding the volume of Inland's business with Anheuser.

On January 20, 1990, Wardlaw wrote a letter to Roger Stone of Stone Container Corporation ("Stone"), an Inland competitor, expressing interest in acting as a consultant for Stone. In the letter, Wardlaw described his success with the Anheuser account, including information about the volume of products that Anheuser bought from Inland and the amount of revenues the account was generating. Wardlaw indicated that Stone should call Anheuser to confirm that Wardlaw's efforts had fostered Inland's growth.

Jim Riley, an employee of Stone, contacted Bob Scheetz, Anheuser's purchasing agent for corrugated materials, on April 4, 1990 to determine whether Wardlaw had achieved the results described in his letter. Scheetz requested a copy of the letter, which was faxed the same afternoon. After reviewing the letter, Scheetz realized that Wardlaw was communicating volume and revenue information that Anheuser considered confidential. Scheetz immediately called Ron Dailey, Inland's sales representative for Anheuser, and expressed his concern over the release of the information. Scheetz did not request that any action be taken against Wardlaw or that the letter be reported to Wardlaw's supervisors.

Dailey met with Wardlaw later that day and informed him that Anheuser had a copy of the letter. Wardlaw became concerned that the contents of the letter might be divulged to Inland's management executives because various Inland and Anheuser representatives were planning a golf trip together in the near future. He decided that he should disclose the letter to his supervisor, Steve Raine. After Raine received a copy of the letter, he sent it to Jim Cory, Inland's Senior Vice President of Sales and Marketing, who placed Wardlaw on administrative leave pending investigation of his actions.

On April 12, 1990, Wardlaw was terminated for violating Inland's Anti-Trust Compliance Policy and for offering to use customer contacts he had acquired at Inland to influence major customers to conduct business with Stone. After the termination, Inland called several of its customers, including Anheuser, to inform them that Wardlaw was no longer employed with Inland.

Wardlaw filed suit against Inland, alleging that his termination violated the Age Discrimination in Employment Act and the Employee Retirement Income Security Act. Wardlaw subsequently sued Anheuser, alleging that Anheuser had tortiously interfered with Wardlaw's employment contract. On August 22, 1992, Wardlaw settled his claims against Inland.

After a jury trial, Wardlaw was awarded $390,000 in actual damages for tortious interference and $1 million in punitive damages. The district court granted Anheuser's motion for judgment as a matter of law on the punitive damages issue, but denied Anheuser's motion on the actual damages issue and its motion for new trial.

II. Anheuser's Appeal

Anheuser initially attacks the district court's denial of its motion for judgment as a matter of law, contending there was no evidence to support the jury's finding that Anheuser tortiously interfered with Wardlaw's employment contract and the evidence overwhelmingly indicates that Anheuser's actions were privileged. In reviewing a district court's disposition of a motion for judgment as a matter of law, this Court applies the same test the district court applied, without any deference to its decision. Little v. Republic Ref. Co., Ltd., 924 F.2d 93, 95 (5th Cir.1991). The applicable test provides:

[T]he 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....

Boeing Co. v. Shipman, 411 F.2d 365, 374 (5th Cir.1969) (emphasis added). ¹ A conflict in substantial evidence must exist to create a jury question. Id. at 375.

To establish a claim for tortious interference, a plaintiff must prove: (1) the existence of a contract subject to interference; (2) willful and intentional interference with that contract; (3) the intentional interference was a proximate cause of plaintiff's damage; and (4) actual damage or loss occurred. Victoria Bank & Trust Co. v. Brady, 811 S.W.2d 931, 939 (Tex.1991). In the instant cause, Anheuser specifically attacks the jury's findings with respect to the intentional interference and proximate cause elements of Wardlaw's tortious interference claim. Anheuser also complains of the district court's rejection of its privilege defense.

A. Intent and Proximate Cause

Intentional interference does not require an intent to injure, only that "the actor desires to cause the consequences of his act, or that he believes that the consequences are substantially certain to result from it." Southwestern Bell Tel. Co. v. John Carlo Tex., Inc., 843 S.W.2d 470, 472 (Tex.1992) (citing Restatement (Second) of Torts § 8A (1965)). ² "Substantially certain" requires that the interference be "incidental to the actor's independent purpose and desire but known to him to be a necessary consequence of his action." Southwestern Bell Tel. Co. v. John Carlo Tex., Inc., 813 S.W.2d 613, 619 (Tex.Ct.App.1991), rev'd on other grounds, 843 S.W.2d 470 (Tex.1992) (quoting Restatement (Second) of Torts § 766 cmt. j. (1965)). In short, Wardlaw had to prove that Anheuser intended to interfere with Wardlaw's employment or was substantially certain that such interference would result from Scheetz's telephone call to Dailey. Wardlaw also had to prove that such interference was a proximate cause of Wardlaw's termination. See Travis v. City of Mesquite, 830 S.W.2d 94, 98 (Tex.1992) (proximate cause consists of cause in fact and foreseeability).

Although we perceive the issue to be close, an examination of the evidence reveals that the facts and inferences would permit reasonable jurors to conclude that Anheuser's interference was intentional. The evidence presented raised a conflict sufficient to create a jury question on the issue of intent. See Boeing, 411 F.2d at 375.

Wardlaw relies on two principle pieces of evidence to support his claim of tortious interference. One piece of evidence involves a phone call between Scheetz and Dailey that occurred in March, approximately two or three weeks before the phone call regarding Wardlaw's dissemination of confidential information. During this conversation, Scheetz mentioned that he had heard that Wardlaw was interested in a position with Stone. Wardlaw argues that Scheetz released this information despite Wardlaw's request in his letter to Stone that his interest in a consulting position not be betrayed. The evidence indicates, however, that Scheetz's disclosure was an offhand comment in the course of a regular conversation with Dailey, made long before Scheetz was aware of the letter to Stone. ³

The second piece of evidence Wardlaw points to is the comment of Jerry Lamm, Anheuser's group manager for packaging, when Cory informed him that Wardlaw had been terminated: "I hope Anheuser-Busch's involvement with the letter to Richard Stone had nothing to do with it." Lamm also admitted that upon hearing about Wardlaw's termination, he knew immediately that Wardlaw would not have been fired if Scheetz had not called Inland.

Although Lamm and Scheetz each testified that Anheuser's sole purpose was to prevent future dissemination of the confidential information, Scheetz admitted during trial that he never contacted Wardlaw to prevent future dissemination, nor did he request that Stone destroy its copy. Scheetz conceded that if he had made such a request, Stone would have complied. Various Inland employees testified that Anheuser did not request that Inland prevent further dissemination by destroying all copies of the letter. After Wardlaw was terminated, Scheetz and Lamm did nothing more to prevent the dissemination.

As to proximate cause, Anheuser...