Opinion
No. 03-1284.
March 16, 2005.
Appeal from the District Court for Poweshiek County, Daniel P. Wilson, Judge.
Roger and Kathie Buchholz appeal the denial of their motion for directed verdict in an action brought by Tompkins Lawncare, Inc. AFFIRMED.
Timothy Ament of Gartelos, Wagner Ament, Waterloo, for appellant.
Brian Earley, Montezuma, for appellee.
Considered by Vogel, P.J., and Mahan and Vaitheswaran, JJ.
Decisions without published opinions. Affirmed.
Homeowners Kathie and Roger Buchholz appeal an adverse jury verdict in an action for money damages brought by the landscaping service, Tompkins Lawncare, Inc. and Chris Tompkins, as principal. They contendthere is insufficient evidence to support the jury's determination that (1) they intentionally interfered with a prospective business advantage, (2) plaintiffs were entitled to actual damages, and (3) plaintiffs were entitled to punitive damages. We affirm.
Mike Tompkins, another plaintiff, dropped his claims during trial.
I. Background Facts and Proceedings
Roger and Kathie Buchholz own property along Lake Ponderosa in Poweshiek County. They hired Chris Tompkins to landscape their shoreline as a means of preventing erosion. The project was completed in December 1999. By the spring of 2000, the Buchholzes noticed erosion on the shoreline and concluded the landscaping job was to blame. They complained to Tompkins who, in response, dumped additional rock on the shoreline at no cost. This measure did not stop the erosion and the Buchholzes complained again. When no further action was taken, the Buchholzes sued Tompkins's landscaping service in small claims court. The court essentially rejected their claim.
Frustrated with the outcome, Kathie Buchholz disseminated one hundred fliers, each with four photographs depicting the shoreline's erosion and each inscribed with the following words:
150 Hillcrest Ridge Lake Ponderosa Saturday, May 26 Roger Kathie Buchholz would like you to take a look at the shoreline renovation by Tompkins Landscaping — In less than 6 months the "shoreline for protection of water" had started to erode. Tompkins Landscaping and Small Claims Magistrate James Schwiebert saw no problem. Now, 6 months later what do you think? Don't let this happen to you — Come See for Yourself. Roger Kathie Buchholz. Tompkins sued the Buchholzes for libel, slander, tortious interference with prospective business advantages, and intentional infliction of emotional distress. The district court directed a verdict for the Buchholzes on the slander claim but found sufficient evidence to submit the remaining claims to the jury. The jury returned a verdict in favor of Tompkins for $26,000 in past and future lost income. The jury also awarded punitive damages of $1,000 against Roger Buchholz and $3,000 against Kathie Buchholz. This appeal followed.II. Sufficiency of the Evidence — Intentional Interference with Prospective Business Advantage
The Buchholzes contend the evidence was insufficient to support the jury's determination that they intentionally interfered with Tompkins's prospective business advantage. That determination is binding on us if supported by substantial evidence. Tredrea v. Anesthesia Analgesia, P.C, 584 N.W.2d 276, 281 (Iowa 1998).
The jury was instructed that Tompkins would have to prove the following elements of intentional interference with prospective business advantage:
1. The plaintiff has a prospective business relationship with potential customers of his landscaping business.
2. The defendants knew of the prospective business relationship.
3. The defendants intentionally and improperly interfered with the relationship by their actions.
4. a. The interference caused potential customers not to enter into or continue the relationship; or
b. The interference prevented the plaintiff from entering into or continuing the relationship.
5. The nature and amount of damage.
With respect to the first element, the jury was instructed that "`prospective business relationship' means a reasonably likely business relationship of financial benefit to the plaintiff." On that element, Tompkins testified that, in 2001, he had jobs booked in the Lake Ponderosa area which totaled eighty percent or more of his income for the year. The Buchholzes did not dispute this testimony. Therefore, there was substantial evidence to establish a "prospective business relationship."
As for the second element, the defendants' knowledge of the prospective business relationship, Kathie Buchholz conceded she was not the "only person in Lake Ponderosa that was using landscaping services," and other "people" around the area "might be" potential customers of Tompkins's landscaping service. She testified she "knew that [Tompkins] would know people at the lake" and was "certain" he would see a copy of the flyer. See Nesler v. Fisher Co., Inc., 452 N.W.2d 191, 196 (Iowa 1990) (finding this element satisfied upon showing that defendants "had reason to know" of potential contracts and finding "binding contract" unnecessary to satisfy this element).
The third element requires proof that the Buchholzes intentionally and improperly interfered with the prospective business relationship. The jury was instructed that interference is intentional if "the defendant either interferes with the prospective business relationship on purpose or knows that conduct is substantially certain to interfere with the prospective business relationship." Another instruction states interference is "improper if the defendant's interference is done with the purpose of financially harming or destroying the plaintiff's business." See Nesler, 452 N.W.2d at 199.
Kathie Buchholz testified she was frustrated with Tompkins and "the system" after losing her small claims action. The flyer advised Tompkins's potential customers, "[D]on't let this happen to you." Although she testified her purpose in composing and distributing the flyer was to get Tompkins to "come and take care of the shoreline," she did not send a copy of the flyer to Tompkins. She also acknowledged that "[s]omeone might" choose not to do business with Tompkins after seeing the flyer. Her testimony amounts to substantial evidence of intentional and improper interference with a prospective business relationship.
As for the fourth element, a causal relationship, Tompkins testified that, in 1998, he had five jobs at Lake Ponderosa. In 1999, he had eight jobs. In 2000, the number had grown to ten. In 2001, Tompkins had sixteen jobs at Lake Ponderosa, including twelve new accounts acquired prior to the distribution of the flyer. After its distribution, he acquired zero accounts.
A Tompkins Landscaping client and Lake Ponderosa resident testified she heard of the flyer and knew it was being passed around and discussed in the community. Another client testified he never saw the flyer, but that had he seen it prior to hiring Tompkins he likely would not have called him to do work on his shoreline. A Lake Ponderosa business owner testified he was forced to disassociate himself with Tompkins and his landscaping business because he was losing customers. He estimated that his own lawn mowing service lost thirty out of forty jobs after the flyer was distributed but before he was able to sever his ties with Tompkins. He also testified that news of the flyer reached area contractors and some said they would not hire Tompkins. A local building contractor testified that a flyer like the one distributed by the Buchholzes could destroy a business. He opined that if he had seen the flyer and not known the quality of Tompkins's work, he would not have hired Tompkins. This testimony substantially supports the causation requirement.
III. Actual Damages
We turn to the jury's award of $26,000 in damages for past and future lost income. These damages were not speculative. Netteland v. Farm Bureau Life Ins. Co., 510 N.W.2d 162, 167 (Iowa Ct.App. 1993). Tompkins testified his income in 1999 was approximately $56,000. In 2000, it had risen to $102,000. By 2001, his income was $117,000. After the flyer was distributed in 2002, his income fell to $73,000. At the time of trial in July 2003, Tompkins estimated his income would be approximately $34,000. The damage award was within the bounds of this evidence. Ballard v. Amana Society, Inc., 526 N.W.2d 558, 561 (Iowa 1995).
IV. Punitive Damages
Turning to the jury's award of punitive damages, we recognize the standard of proof is high. See Iowa Code § 668A.1 (1)(a) (2001) (requiring proof by preponderance of clear, convincing, and satisfactory evidence). We also recognize Tompkins was required to establish a "willful and wanton disregard for the rights or safety of another." Id. A jury could have found the following. Frustrated after losing the small claims case, Kathie Buchholz, with the consent of her husband, created, printed, and distributed the flyer. The flyer announced that Tompkins's work was sub-par, despite the small claims court finding to the contrary. As a direct result of its dissemination, Tompkins lost business. Although the Buchholzes stopped disseminating the flyer after receiving a letter from Tompkins's attorney, the damage was already done. This evidence was sufficient to establish a willful and wanton disregard for the rights of Tompkins and is sufficient to support the punitive damage award.
V. Disposition
We affirm the jury verdict and judgment in its entirety.
AFFIRMED.