Howard v. American Oil Company
Howard v. American Oil Company
Opinion of the Court
Plaintiff, a lessee of a service station, brought this action for damages against defendant lessor for claimed interference with his business relations and for breach of the covenant of quiet enjoyment implied in the lease. Defendant appeals from a judgment for plaintiff for actual and punitive damages. We reverse.
Defendant company had commenced an action for possession of the service station in September 1963 which resulted in a verdict and judgment for the present plaintiff who remained in possession and was in possession of the property at the time of trial of this action in August 1964. Other facts will be stated in the course of the opinion. Plaintiff's claims and some instructions of the trial court will first be discussed as the disposition of these items has some bearing on another issue.
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Plaintiff's complaint states the causes of action in three separate counts. Count 1 alleges the plaintiff was lessee of a gasoline service station under a lease dated August 30, 1962; that defendant lessor maliciously sought to coerce plaintiff into abandoning the premises and interfered with his use and occupancy thereof by harrassing his employees, interfering with his private business relations, with his bank and other persons for the purpose of impairing plaintiff's credit and threatening to retake the premises, and a loss of $7,500 actual damages to his business good will, reputation and his use and operation of the leased premises.
Count 2 realleges Count 1 and then alleges defendant's acts interfered with plaintiff's quiet and peaceable possession of the leased premises with actual damages - of $7,500. Count 3 real-leges the foregoing counts and that such conduct was oppres
The charge to the jury stated plaintiff "claims that defendant breached a covenant of quiet enjoyment under a lease between them" and outlined the claims set out in Count 1, with some additions from the evidence as to coercive credit practices not therein alleged, with no mention of any amount of damages as to this claim; it then stated his claims in the second count and alleged defendant's malicious acts "interfered with his quiet and peaceable possession of the leased premises' resulting in plaintiff's damage of $7,500; this was followed by a statement of the third claim of $15,000 punitive damages. The situation therefore seems somewhat confused. Were there three causes of action or two causes of action? Defendant in this court has treated the complaint as containing three causes of action — one for damages for breach of the covenant of quiet enjoyment, one for business interference, and a third for exemplary damages. Plaintiff's brief (in a different order) states the action was brought for damages for defendant's interference with his business relations and defendant's breach of the covenant of quiet enjoyment implied in the lease in force between the parties and for the $15,000 punitive damages.
By Instruction 6 the trial court advised the jury that if it found defendant maliciously interfered with plaintiff's lawful possession and operation of the station and his quiet enjoyment of the premises and the plaintiff was damaged thereby, the plaintiff was entitled to a verdict for loss of customers, employees, good will and profits of his business not exceeding $7,500. Plaintiff's counsel at the trial indicated his understanding of the causes of action by stating in an offer of proof that certain claimed damages were attorneys' fees and expenses incurred as a result of "unlawful interference in his lease (and?) possession" of the station by defendant in the forcible entry and detainer action "made necessary by the breach of the covenant of quiet enjoyment" of the lease.
"You are instructed that for the defendant to be guilty of a breach of the covenant of quiet enjoyment, by the failure or omission to perform some act, or acts, you must first find that there was a duty upon the defendant to perform such act, or acts, under its lease with the plaintiff. The lease in evidence in this case carries with it an implication in law that the defendant lessors would refrain from acts voluntarily undertaken which would substantially impair the character and value of the leased premises."
In argument to the jury plaintiff's counsel, as he was then entitled to do, read this instruction with the comment "we have recounted to you the numerous acts they (defendant's employees) have done. Interfered wrongfully with his possession of those premises". Later he argued: "Mr. Howard had contractual rights under the lease. He had a contractual right they would not interfere with his business * * * with his beneficial enjoyment of the premises". Defendant had objected to Instruction 11 and the instructions as a whole for the reason the complaint included three causes of action of which the first two were ambiguous as to their theory unless they be accepted as breach of a covenant of quiet enjoyment and malicious interference with business relations, with an attempt to double (couple?) the former, a contractual cause of action, with an action of tortious interference with the possessory use of the property; that the instructions did not clearly set out or separate the two distinctly and the jury could therefore award exemplary damages as part of the breach of covenant of quiet enjoyment. Defendant's requested Instruction 5 was to the effect that commencement of an action to recover possession was not a breach of the covenant of quiet enjoyment; the court denied this request.
The mere commencement of legal proceedings against a lessee relating to his right to possession is not sufficient to constitute a breach of a covenant for quiet possession. 51 C.J.S. Landlord and Tenant § 323; Black v. Knight, 176 Cal. 722, 169 P. 382; L.R.A. 1918C, 319 and Annotation, p. 323. In order to
The lease involved was for a term commencing September 1, 1962 and ending August 31, 1963 with "No subsequent successive terms". Whether the jury's verdict for defendant was based on an oral extension of the lease or some other reason does not appear from this record; however, there is no evidence to show either malice or lack of probable cause- existed in September 1963 when the forcible entry action was commenced. That the jury could find for plaintiff, because of defendant's unsuccessful forcible entry action appears also from Instruction 5 which permitted plaintiff here to recover if he established he was in lawful possession of the premises and operating a business thereon, (though no time was stated there was no issue as to this) and defendant maliciously and without justification or excuse did intermeddle and interfere with his business and "his quiet enjoyment of said premises."
As to this malice used in this instruction the court advised the jury it did not mean actual or express malice in the sense of ill will or spite, but rather legal or technical malice that is the intentional doing of a harmful or injurious act without justification or excuse.
As we have indicated defendant had not breached the lease by bringing its unsuccessful forcible entry action and it was reversible error for the court to include reference to it in the instructions and refuse the request noted. Nor does Exhibit A, being departmental correspondence of defendant, add sufficient proof to make defendant's law action wrongful. Defendant had, by letter of August 23, 1963 notified plaintiff his lease was can-celled August 31, 1963 and to deliver up possession of the premises and defendant's equipment of that date. Plaintiff telephoned defendant's District Manager and told him his interpretation of the lease was it ran for another year; the manager told plaintiff he had been informed by the company's legal department that plaintiff would have to move. Later three of defendant's representa-
Plaintiff cites Kuiken v. Garrett, 243 Iowa 785, 51 N.W.2d 149, 41 A.L.R.2d 1397, and Platou v. Swanton, 59 N.D. 466, 230 N.W. 725; both are distinguishable. The landlord in Kuiken during four months caused ten separate notices to be served on the tenant and filed four verified petitions in forcible entry and detainer which were dismissed. The court stated the "repeated" notices and actions may support an inference of malice. In Platou, elevator service was discontinued and the hall to a doctor's office was obstructed during extended remodeling of the building; these were physical interferences with facilities of ingress and egress to plaintiff's office. Neither situation existed here.
II.
Defendant's motions for directed verdicts at the conclusion of plaintiff's evidence and renewed at the close of the evidence raise the question of insufficiency thereof to sustain the verdict. The service station tease provided plaintiff pay defendant $10 a month and 1.6 cents per gallon on all gasoline delivered to the station for resale. As set forth in his brief plaintiff's claim is based on the contention defendant interfered with his employees, his banker and his customers. The meetings relative to the bank about the property on which it had a mortgage have been discussed. There was no evidence any customer was discouraged from or inconvenienced in patronizing plaintiff and though there is serious doubt of proof of damages
The evidence is voluminous; to condense it is difficult without seeming to omit details. After defendant's forcible entry action, plaintiff's testimony showed and he bases his claim to recover on defendant's conduct which, after indicating his claim and testimony offered to support it, the undisputed or preponderance of the evidence will then be stated.
(Tires) Plaintiff had previously purchased a carload of tires each year; he was not solicited by a salesman as theretofore nor a sign kit for them; he bought none for 1964 and not having a stock of defendant's Atlas tires, which were nationally advertised as were its other Atlas products, including batteries and antifreeze, he was unable to adjust defendant's tires under its liberal adjustment policy; he was "not invited" to dealers' meetings to promote sales in 1964 nor included in competition for advertising, cleanliness or service; nor was he "given opportunity" to participate in employee incentive programs; he was not given "encouragement" for tire sales in 1964 as before, his picture being omitted from two tire advertisements published by defendant; generally as to tires, batteries and accessories a company salesman had formerly made two calls a month; after September 1963 no calls in reference to sales were made and he was not given "any opportunity to buy" such products from them. (Antifreeze) Before 1964 he sold Atlas Perma-Guard antifreeze guaranteed to be replaced free of charge during a season; he was not "able to purchase" it in 1964 nor furnished tags to be used with such sales; he could have purchased Frost-Guard, the same permanent type at the bulk plant, but did not do so. (Batteries) He was not "able to buy any of the Atlas batteries in 1964" nor did he receive a sign kit advertising them and used by other stations, as were some other similar signs advertising Atlas products and service. (Sign kit) He was never "given a chance to buy" the 1964 sign kit, which cost $59 either for cash or any other way.
It is undisputed plaintiff had purchased Atlas products from defendant on credit and had become indebted to defendant for
Plaintiff was not required by his lease to buy any of defendant's products nor was he in any way restricted in products he could handle or sell at the station. Indeed, the lease expressly provides and permits such freedom of purchasing and selling. The only limitation is if plaintiff discontinue sale of gasoline supplied by defendant, he shall remove all signs identifying products of defendant. So plaintiff was at liberty to deal with any supplier at his discretion. Defendant was under no obligation to invite plaintiff to its sales promotion meetings as plaintiff for several months had sold tires other than those sold by defendant. He received literature about various tire sale campaigns, but did not contact any sales representatives to participate in them. Further, defendant did not at any time refuse to sell its products to plaintiff. His testimony was:
*296 "Q Is it your testimony, Mr. Howard, that the salesman for the American Oil Company * * * have refused to sell you Standard Oil products? Is that your testimony?
"A They have not sold me anything.
"Q I'm asking you is it your testimony they have refused to sell you products?
"A I don't understand your question. * * *
"Q Well, I think my question was, Mr. Howard, were you ever denied the purchase of products when you offered to pay cash for them?
(Objection Overruled)
"A No."
Defendant has an absolute right to require cash or refuse to sell to plaintiff and omit him from its various sales meetings or advertising plans and promotions and incurred no liability for so doing.
(Maintenance)) The letter "N" in the "STANDARD" sign on the station was out of line three or four months when defendant's maintenance man residing in a different city made periodic trips every three or four weeks to repair its buildings and equipment. Plaintiff did not report this nor complain to anyone about it until this trial, he "Just let it sit there". Two pumps out of six at the station were out of order a week before the trial of this action. Plaintiff reported this to the bulk station operator, who said he would get them repaired; one was repaired within a week and the other needed parts not immediately available. In the meantime two seldom used pumps on a lower level were moved to the place of the defective pumps. The lease required plaintiff to keep the buildings and equipment in repair, so repair was his obligation. See also SDC 38.0410.
(Employee Coon) Defendant entered a lease of this station to one Kusler commencing September 1, 1963, when it assumed plaintiff's lease ended. Mail from defendant company to Kusler's
Eagle Glass & Mfg. Co. v. Rowe, 245 U.S. 275, 38 S.Ct. 80, 62 L.Ed. 286, an action where defendants were alleged to be directly soliciting and pressuring miners to quit their jobs and join the union and others to keep their jobs and join the union contrary to their employment contract and Wear-Ever Aluminum, Inc. v. Townecraft Industries, Inc., 75 N.J.Super. 135, 182 A.2d 387, where defendant's competitors were directly enticing a whole sales crew, at mass meetings conducted by another former employee, to leave their employer who had trained them cited by plaintiff in his brief as to employee Coon are fact situations markedly different from the case at bar. The same may be said of the cases of Tuttle v. Buck, 107 Minn. 145, 119 N.W. 946, 22 L.R.A.,N.S., 599, and Dunshee v. Standard Oil Co., 152 Iowa 618, 132 N.W. 371, 36 L.R.A.,N.S., 263 cited in oral argument. In the former, the complaint alleged defendant banker in a
Our conclusion is the defendant's motion for a directed verdict dismissing plaintiff's action should have been granted and that part of the judgment appealed from which entered judgment for plaintiff on the jury's verdict is reversed.
. For instance, it appeared during part of 1964 plaintiff’s retail prices on gasoline were 1 cent a gallon higher than other Standard Oil or major company stations.
Dissenting Opinion
(dissenting).
In my opinion there is competent evidence in the record, viewed in the light most favorable to plaintiff which supports the verdict.
Reference
- Full Case Name
- HOWARD, Respondent v. AMERICAN OIL COMPANY, Appellant
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- Published