Davis v. HydPro, Inc.

¶1OPINION

¶2The jury found that defendant1 tortiously interfered with plaintiffs’2 contractual relationship with a third party,3 and the trial court rendered judgment on the jury’s verdict that plaintiffs recover the sum of $1,000,000 plus prejudgment interest at the rate of 10 percent per annum, compounded daily, from March 20, 1987, until June 20, 1991, and post-judgment interest at the rate of 10 percent per annum, compounded annually. Defendant appeals. We reverse and render.

¶3The Jury’s Verdict

¶4The questions to the jury and the jury’s answers to those questions are quoted in pertinent part as shown:

¶5Do you find from a preponderance of the evidence that on March 20, 1987, a contract existed between Plaintiffs and McDonald Production, Inc.?

¶6Gas Processing Agreement Yes

¶7Gas Purchase Agreement Yes

¶8Do you find from a preponderance of the evidence that Defendant knew, or in the exercise of ordinary care should have known, of a contract between Plaintiffs and McDonald Production, Inc.?

¶9We do

¶10Do you find from a preponderance of the evidence that Defendant interfered with a contract between Plaintiffs and McDonald Production, Inc.?4 We do_

¶11Do you find from a preponderance of the evidence that Defendant’s interference was willful and intentional? We do_

¶12What sum of money, if any, do you find from a preponderance of the evidence would reasonably compensate Plaintiffs for damages, if any, proximately caused by Defendant's interference?5

¶131,000,000

¶14*139Do you find from a preponderance of the evidence that the interference by Defendant was done with actual malice?

¶15We do not

¶16The punitive damage question was not answered pursuant to the court’s instruction not to answer it unless the answer to Question 6 was “We do.”

¶17Points of Error

¶18Defendant presents five points of error in which he argues that the trial court erred: (Point One) in entering judgment for HydPro6 because there is no evidence [or alternatively the evidence is factually insufficient] to support the jury’s answers to Questions 3 and 4; (Point Two) in overruling his objection to the instruction accompanying Question 3 [see Footnote 4]; (Point Three) in entering judgment for HydPro7 because there is no evidence [or alternatively factually insufficient evidence] to support the jury’s answer to Question 5; (Point Four) in overruling his objections to Question 5 because, inter alia, it set forth an improper measure of damages; and (Point Five) in entering judgment for prejudgment interest because the jury did not segregate past and future damages. We sustain the first and third points of error, and the other points become moot'and need not be discussed.

¶19Undisputed Facts

¶20The undisputed facts show that McDonald Production, Inc. breached its agreements with plaintiffs on March 20, 1987, and there is no proof of any contractual interference by defendant prior to that date.

¶21While the jury was free to reject the proof that defendant and his employees had no contact with McDonald before March 20, the jury was not free to find that defendant’s conduct after the breach was willful and intentional interference which proximately caused plaintiffs’ damages.

¶22Tortious Interference

¶23The Supreme Court stated in Juliette Fowler Homes, Inc. v. Welch Associates, Inc., 793 S.W.2d 660 at 664 (Tex.1990), and again in Victoria Bank & Trust Company v. Brady, 811 S.W.2d 931 at 939 (Tex.1991), that the elements of a cause of action for contractual interference in Texas are:

(1) the existence of a contract subject to interference^] (2) the act of interference was willful and intentional[;] (3) such intentional act was a proximate cause of plaintiffs damage^ and (4) actual damage or loss occurred. (Emphasis added)

¶24Juliette Fowler and Victoria Bank did not overrule the holding in Texaco, Inc. v. Pennzoil Co., 729 S.W.2d 768 at 803 (Tex.App.-Houston [1st Dist.] 1987, writ ref’d n.r.e.), cert. dism’d, 485 U.S. 994, 108 S.Ct. 1305, 99 L.Ed.2d 686 (1988), that:

A necessary element of the plaintiff’s cause of action is a showing that the defendant took an active part in persuading a party to a contract to breach it. Merely entering into a contract with a party with the knowledge of that party’s contractual obligations to someone else is not the same as inducing a breach. It is necessary that there be some act of interference or of persuading a party to breach, for example by offering better terms or other incentives, for tort liability to arise. (Emphasis added; Citations omitted)

¶25Reading Juliette Fowler and Victoria Bank in harmony with Texaco, Inc. v. Pennzoil Co., supra, convinces us that the “active part in persuading a party to a contract to breach it” is a part of the proximate cause requirement stated in Juliette Fowler and Victoria Bank. Since *140there is no proof that the defendant in this ease, or any of his employees, had any negotiations with McDonald after its contract with plaintiffs until after McDonald’s breach of that contract, the trial court should have granted defendant’s motion for judgment non obstante veredicto. See Texaco, Inc. v. Pennzoil Co., supra, and Arabesque Studios, Inc. v. Academy of Fine Arts International, Inc., 529 S.W.2d 564 at 568 (Tex.Civ.App.-Dallas 1975, no writ), which held that plaintiff must show that defendant “knowingly induced” the breach and that it is not enough to show that defendant “reaped the advantages of a broken contract.” See also RESTATEMENT (SECOND) OF TORTS § 766 cmt. n8 and Annot., 26 A.L.R.2d 1227 (1952).

¶26This Court’s Ruling

¶27The judgment of the trial court is reversed; this court renders judgment that plaintiffs take nothing from defendant on their claims that he tortiously interfered with their contractual relationship with McDonald Production, Inc.

¶28Reversed and rendered.