Summary
In Smith v. Royal Seating, Ltd., 2009 WL 3682644 (Tex.App.-Austin 2009, no pet.) (memo op.) in considering a challenge to the sufficiency of the evidence of a tortious-interference claim, the appellate court concluded that there was sufficient evidence to support that appellant's actions caused actual damages to the appellee.
Summary of this case from Cuidado Casero Home Health of El Paso, Inc. v. Ayuda Home Health Care Servs., LLCOpinion
No. 03-09-00114-CV
Filed: November 6, 2009.
Appealed from the District Court of Milam County, 20th Judicial District No. 32,005, Honorable Ed Magre, Judge Presiding.
Affirmed.
Before Chief Justice JONES, Justices PATTERSON and PURYEAR.
Dissenting Opinion by Justice PURYEAR.
MEMORANDUM OPINION
Appellee Royal Seating, Ltd., a manufacturer's distributor of auditorium chairs, brought suit against appellants Rock Systems Group, L.L.C., a former dealer for Royal Seating; Lone Star Seating, L.L.C., a competitive distributor of the chairs; and Bobby J. Smith, the owner of both Rock Systems and Lone Star. Royal Seating claimed that appellants tortiously interfered with prospective business relationships based on appellants' conduct in substituting Lone Star for Royal Seating as the distributor in transactions in which Royal Seating and Rock Systems were jointly negotiating with the end users. In two issues, appellants challenge the factual and legal sufficiency of the evidence to support the district court's judgment in favor of Royal Seating on its tortious interference claim. For the reasons that follow, we affirm the judgment of the district court.
BACKGROUND
Royal Seating was a non-exclusive distributor of auditorium "Alessandria" chairs (the "chairs") for Mobiliario, a manufacturer in Mexico. Mobiliario did not sell its chairs directly to dealers but to distributors, and Royal Seating did not sell directly to end users but to dealers who then sold the chairs to end users. Rock Systems was a dealer for Royal Seating from 2002 to 2006.
Royal Seating also manufactures chairs and other furniture, but the type of chair at issue, the "Alessandria" chair, was manufactured by Mobiliario.
In early 2006, Royal Seating, as the distributor, and Rock Systems, as the dealer, were negotiating with three churches in California — Cottonwood Christian Center, Abundant Living Family Church, and First Evangelical Free Church ("the churches") — that were interested in purchasing a large quantity of the chairs as a group. Representatives from both Royal Seating and Rock Systems were involved in the negotiations with the churches. The churches initially agreed to purchase approximately 8,700 chairs and installation services from Rock Systems. Ultimately, Rock Systems did not purchase the chairs for the churches from Royal Seating but from Lone Star Seating, a company Smith formed at the end of 2006.
Cottonwood Christian Center executed a purchase order dated May 31, 2006, to "Rock Systems Group/Royal Seating Ltd." and an "AIA Document" dated June 2, 2006, with "Rock Systems Group/Royal Seating Ltd."; Abundant Living executed a purchase agreement dated June 1, 2006, to "Rock Systems Group/Royal Seating Ltd." and a subsequent purchase order dated March 23, 2007, to "Rock Systems Group"; and First Evangelical had an unsigned purchase order with "Rock Systems Group/Lone Star Seating Ltd." dated October 2, 2007. Cottonwood Christian Center also made a deposit by check in the amount of $105,487.50, dated "7/12/2006," that was payable to "Rock Systems Group/Royal Seating, Ltd." These documents were admitted into evidence.
In October 2007, Royal Seating brought suit against appellants, seeking past due amounts owed on other transactions and damages for breach of fiduciary duty and tortious interference with contracts and prospective business relationships stemming from the substitution of Lone Star for Royal Seating as the distributor in the transactions with the churches. Royal Seating obtained a summary judgment against Rock Systems on the past due amounts owed on the other contracts, and Royal Seating's remaining claims proceeded to trial to the court in December 2008.
The summary judgment on the past due amounts on the other transactions was incorporated into the final judgment, and Rock Systems has not appealed that portion of the judgment. The district court awarded $195,751.95 on the past due amounts. The district court did not grant judgment in favor of Royal Seating on its breach of fiduciary claims, and Royal Seating has not appealed that determination.
At trial, the witnesses were appellant Smith; Rick Creel, a vice president of Royal Seating; and Gary Pemberton, a former sales employee of Royal Seating from 1997 to August 31, 2006, when he began working with appellants as an independent contractor. The witnesses testified to their respective understandings of the relationship between the parties, the churches, and Mobiliario. Although the witnesses' testimony conflicted concerning whether Royal Seating or Rock Systems first initiated contact with the churches, their testimony was largely consistent concerning the past working relationship between Royal Seating, as Mobiliario's distributor, and Rock Systems, as Royal Seating's dealer; the involvement of both Rock Systems and Royal Seating in the negotiations with the churches; Lone Star's formation; and the ultimate structure of the transactions with the churches that substituted Lone Star for Royal Seating as the distributor.
Creel testified that Royal Seating's initial contacts with the churches were through Jensine Bard, a design professional in California, and Steve Lazarian, a construction manager for at least two of the churches; Pemberton testified that Royal Seating's initial contact with the churches was through Smith; and Smith testified that Rock Systems's initial contact with the churches was through another contact in California, Ron Hester.
Smith testified that Abundant Living ultimately purchased 3,550 chairs, Cottonwood Christian Center 3,300 chairs, and First Evangelical 1,850 chairs from Rock Systems and that Rock Systems purchased the chairs for the churches from Lone Star. Smith also testified that
• his initial meeting with the churches was in May 2006,
• he received purchase documentation in June 2006 from Abundant Living addressed to "Rock Systems Group/Royal Seating, Ltd.,"
• he contacted Mobiliario in June 2006 about buying direct from it,
• he received a check in July 2006 in the amount of $105,487.50, as a "deposit" that was payable to "Rock Systems Group/Royal Seating, Ltd." from Cottonwood Christian Center,
• he deposited the check into Rock Systems' account without advising Royal Seating of the check,
• he formed Lone Star in December 2006,
• Lone Star became a distributor for Mobiliario and began operations in 2007, and
• he owned and operated both Lone Star and Rock Systems out of his home.
The district court found in Royal Seating's favor on its tortious interference claim and awarded actual damages of $78,300.00 against appellants jointly and severally. The district court entered findings of fact concerning Royal Seating's tortious interference claim including the following:
3. There was a reasonable probability that Royal Seating would have entered into [] business relationships with [the churches].
4. [Smith, Rock Systems, and Lone Star] intentionally interfered with the relationships between [the churches] and Royal Seating.
5. The conduct of Smith, Rock Systems, and Lone Star in interfering with the relationships between Royal Seating and [the churches] was independently tortious and unlawful.
6. The interference of Smith, Rock Systems, and Lone Star was the proximate cause of damages to Royal Seating.
7. Royal Seating suffered damages in the amount of $78,300 due to the interference of Smith, Rock Systems, and Lone Star.
The district court also entered conclusions of law concerning Royal Seating's tortious interference claim including the following:
3. [Smith, Rock Systems, and Lone Star] tortiously interfered with a prospective business relationship between Royal Seating and [the churches].
Conclusion of law number 3 only listed two out of three of the churches, but neither party raises a complaint concerning the omission.
4. [Smith, Rock Systems, and Lone Star] are jointly and severally liable to Royal Seating in the amount of $78,300.00 for the tortious interference.
This appeal followed.
ANALYSIS
In their first issue, appellants challenge the legal and factual sufficiency of the evidence to support the district court's findings concerning the elements of Royal Seating's tortious interference claim. In their second issue, appellants contend the evidence was legally insufficient to support a finding that Rock Systems interfered with the potential business relationship between Royal Seating and the churches because "a party to a business relation cannot interfere with itself." At their heart, appellants' issues address the legal effect of appellants' conduct in substituting Lone Star for Royal Seating as the distributor in the transactions with the churches. Appellants urge that they are not liable because Rock Systems had no legal obligation to purchase the chairs from Royal Seating.
Standard of Review
This Court reviews a trial court's findings of fact for legal and factual sufficiency of the evidence by the same standards applied to a jury verdict. Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex. 1996); Anderson v. City of Seven Points, 806 S.W.2d 791, 794 (Tex. 1991). A legal sufficiency challenge may be sustained when the record discloses one of the following situations:
(a) a complete absence of evidence of a vital fact; (b) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact; (c) the evidence offered to prove a vital fact is no more than a mere scintilla; [or] (d) the evidence establishes conclusively the opposite of the vital fact.
City of Keller v. Wilson, 168 S.W.3d 802, 810 (Tex. 2005). When reviewing a finding for legal sufficiency, the reviewing court considers the evidence in the light most favorable to the judgment, crediting favorable evidence if a reasonable factfinder could, and disregarding contrary evidence unless a reasonable factfinder could not. Id. at 807. When considering a factual sufficiency challenge, the reviewing court considers all of the evidence and "should set aside the verdict only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust." Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986).
In a case tried to the court, the trial court is the "sole judge of the credibility of the witnesses and the weight to be given their testimony." McGalliard v. Kuhlmann, 722 S.W.2d 694, 696 (Tex. 1986). The trial court may believe one witness, disbelieve others, and resolve inconsistencies in any witness's testimony. Id. at 697.
Tortious Interference with Prospective Business Relationship
In their first issue, appellants contend that there was no evidence, or alternatively insufficient evidence, to support the district court's findings that (i) there was a reasonable probability that Royal Seating would have entered into a business relationship with the churches, (ii) appellants intentionally interfered with the relationship between the churches and Royal Seating, (iii) appellants' conduct in interfering with the relationship was independently tortious and unlawful, and (iv) appellants' interference was the proximate cause of damages to Royal Seating. The district court's findings track the elements of a claim for tortious interference with a prospective business relationship. These elements are well established. See Wal-Mart Stores, Inc. v. Sturges, 52 S.W.3d 711, 726 (Tex. 2001); Bradford v. Vento, 48 S.W.3d 749, 757-58 (Tex. 2001); Richardson-Eagle, Inc. v. William M. Mercer, Inc., 213 S.W.3d 469, 475 (Tex. App.-Houston [1st] 2006, pet. denied); Bright v. Addison, 171 S.W.3d 588, 598 (Tex. App.-Dallas 2005, pet. denied); Baty v. Protech Ins. Agency, 63 S.W.3d 841, 860 (Tex. App.-Houston [14th] 2001, pet. denied). We review the evidence of each of the challenged elements.
To establish tortious interference with a prospective business relationship, a plaintiff must prove (i) a reasonable probability that the plaintiff would have entered into a business relationship; (ii) an independently tortious or unlawful act by the defendant that prevented the relationship from occurring; (iii) the defendant did such act with a conscious desire to prevent the relationship from occurring or the defendant knew the interference was certain or substantially certain to occur as a result of the conduct; and (iv) the plaintiff suffered actual harm or damages as a result of the defendant's interference. See Wal-Mart Stores, Inc. v. Sturges, 52 S.W.3d 711, 726 (Tex. 2001); Baty v. Protech Ins. Agency, 63 S.W.3d 841, 860 (Tex. App.-Houston [14th] 2001, pet. denied).
Appellants contend that Royal Seating also was required to show lack of justification or privilege for appellants' actions. See Texas Disposal Sys. Landfill, Inc. v. Waste Mgmt. Holdings, Inc., 219 S.W.3d 563, 590 (Tex. App.-Austin 2007, pet. denied). Although this Court included lack of justification or privilege as an element of a claim for tortious interference with a prospective business relationship in that case, the element was not at issue and its inclusion as an element is not binding precedent, see Travelers Indem. Co. v. Fuller, 892 S.W.2d 848, 852 (Tex. 1995) (language is dicta that is a mere expression of opinion on a point or issue not necessarily involved in the case and does not create binding precedent under stare decisis), and, in any event, was error. See Sturges, 52 S.W.3d at 726. The supreme court in Sturges explained that the concepts of justification and privilege are subsumed in the plaintiff's proof and that justification and privilege are defenses in a claim for tortious interference with prospective relations only to the extent that they are defenses to the independent tortiousness of the defendant's conduct. See id. at 726-27. Otherwise, the plaintiff need not prove that the defendant's conduct was not justified or privileged, nor can a defendant assert such defenses. See id.
1. Reasonable probability of business relationship
Appellants contend that there was no evidence that Royal Seating would have entered into a business relationship with any of the churches because Royal Seating concedes that it only sells chairs directly to dealers who then sell to end users and that it only attempted to sell the chairs to Rock Systems for the ultimate use of the churches. The essence of appellants' argument is that evidence of a prospective direct sale between Royal Seating and the churches was required to satisfy this element.
Royal Seating presented evidence concerning its initial contact with the churches, its pursuit of the sales to the churches for several months in 2006 with Rock Systems, and the churches' intent to have a business relationship with Royal Seating. Royal Seating's vice president Creel testified to his recollection of how the potential sales with the churches arose and that the churches intended to do business with Royal Seating:
[M]y recollection was that they — we were contacted about three churches that [Jensine Bard, a design professional, and Steve Lazarian, a construction manager for the churches] were working with in California, and they wanted — they were interested in Royal Seating's chairs, which was the Mobiliario product out of our product line, and that based on that interest, they wanted to do business with us — the churches wanted to do business with us. And we informed them that we did not sell direct. We are a dealer-based organization, and we informed them that we do not sell direct and that we would have to have a dealer. And so at that point, basically, they said, well, the Royal Seating chairs and the warranty along with [the chairs] is what they were interested in. And then we looked at a dealer that would fit, you know, and would be able to help them in California.
Creel also testified to Royal Seating's expectations that Royal Seating would be the distributor on the transaction with the churches when the churches placed their orders for the chairs with Rock Systems. Similarly, Royal Seating's former employee Pemberton testified that he expected the sales to the churches to take place from Royal Seating.
Appellants called Pemberton to testify on their behalf concerning the initial contact with the churches, but Pemberton provided testimony that supported Royal Seating's version of events. During cross-examination, Pemberton testified concerning a letter that he sent to Bard in February 2006 that Royal Seating would pay her a "finder's fee" on the sale to the churches and that he expected the sales to take place from Royal Seating:
Q. In [the February 2006 letter], are you telling Ms. Bard that you will pay her $28,000 as a finder's fee on the sale of the chairs to two of these churches in California?
A. I am telling her that I will pay her $28,000 because she put some initial work into Cottonwood.
Q. And looking at the second full paragraph there, the middle paragraph, at the end of it, the next-to-last sentence, do you say, "Rock Systems will, in turn, issue purchase orders to Royal Seating for the chairs"?
A. Yes.
Q. And that's what you expected to happen, right?
A. Yes.
Q. And in the next sentence, you say "the churches fully intend on using our chairs"?
A. Yes.
Q. And you say, "we expect the contracts to be signed in March"?
A. Yes.
Q. Okay. And this letter was in February, so a month later, you expected to have a deal done with these two churches?
A. Right.
Correspondence between representatives of Rock Systems, Royal Seating, and the churches during the negotiations was admitted into evidence and was consistent with this testimony. An e-mail dated March 27, 2007, from Lazarian to Smith, copied to Creel and others, expressed the churches' prior understanding and continued desire that Royal Seating be the distributor on the transaction:
Recently you have informed us of your intention to end your dealership status with Royal Seating. In response I have informed you of my serious concerns about our current orders with you for Royal seats. . . . I had a very good phone conference with [Creel and another employee] of Royal this morning in which we discussed the order. On behalf of these three churches, I have decided to proceed with our order with Royal through you. Since much of what was represented to the churches would be greatly diminished by any departure from our original deal, we cannot change the structure at this time. We will continue to work through you but must have seats that are manufactured and installed with a warranty that runs from Royal.
Since the deal was made with all three churches it must be structured the same for each one. . . . Since Royals' name is everywhere on the information you gave the churches (including the warranty), we must proceed on this basis. The determining factor with First [Evangelical] was the lengthy warranty.
* * *
We all understand that sometimes businesses need to change and adapt to the marketplace. This may be your time to make such a change but we all firmly believe that it should not be at the expense of the people we serve. We would like the Royal/Rock Systems Group team to stay together long enough to get these orders completed.
Thank you for your willingness to cooperate and we look forward to completing these projects with you and Royal.
Lazarian iterated that the churches expected the chairs that they were purchasing to come from Royal and that the extended warranty offered by Royal Seating was an important factor in the decision to purchase the chairs.
Smith testified to his conversations with Lazarian as to the warranty:
Q. Did [Lazarian] tell you he wanted the warranty that runs from Royal Seating?
A. He had mentioned he wanted that, yes.
Q. Did he tell you that the determining factor with First [Evangelical] was the lengthy warranty?
A. Yes, he did.
Also admitted as exhibits were documents executed by the churches reflecting their intentions to purchase the chairs from both Rock Systems and Royal Seating: (i) a copy of a check in the amount of $105,487.50, dated "7/12/2006," and payable to "Rock Systems Group/Royal Seating, Ltd." from Cottonwood Christian Center that reflects that the payment was a "deposit" for the chairs; (ii) a purchase order from Cottonwood Christian Center to "Rock Systems Group/Royal Seating Ltd." dated May 31, 2006; (iii) an "AIA Document" for furniture between Cottonwood Christian Center and "Rock Systems Group/Royal Seating Ltd." executed by Smith as the "rep. dealer"; and (iv) a "Purchase Agreement" dated June 1, 2006, executed by a representative of Abundant Living and Smith that was titled "Rock Systems Group/Royal Seating Ltd."
Also admitted as an exhibit were e-mails from May 25, 2006, to May 26, 2006, with the heading "Meeting Notes Follow-Up and Thanks — Cottonwood and Abundant Living!" The initial e-mail was sent by Bard to Lazarian and copied to Pemberton, Smith, Hester, and others. Lazarian replied to Bard, without copying anyone else:
Jensine:
I think we need to make our checks payable to Royal Seating. Will that be a problem? I would feel better in case there is no Rock Systems Group in a year. I like [Smith] but we need to protect Cottonwood and Abundant Living. . . .
Appellants provided conflicting evidence that Rock Systems had the initial contact with the churches through its contact Ron Hester and urge that the e-mail from Lazarian should be discounted, questioning his authority to speak for the churches. But it was within the province of the district court as the fact-finder to resolve the conflicts in the evidence, and the district court could have credited the evidence that the churches desired the Royal Seating warranty, the purchase documents from Cottonwood Christian Center and Abundant Living in 2006, and the check that included "Royal Seating" as a payee to conclude that Royal Seating and the churches would have entered into a business relationship. See McGalliard, 722 S.W.2d at 696 (district court as the fact-finder "sole judge of the credibility of the witnesses and the weight to be given their testimony").
Even if we assume that a claim of tortious interference with a prospective business relationship requires a direct contractual relationship as appellants contend, the evidence was that Royal Seating would have warranted the chairs directly to the churches.
We conclude that the evidence was legally and factually sufficient to support the district court's finding that there was a reasonable probability that Royal Seating and the churches would have entered into a business relationship. See City of Keller, 168 S.W.3d at 810; Cain, 709 S.W.2d at 176.
2. Intentional interference
Appellants contend that the evidence was insufficient to support the district court's finding that appellants intentionally interfered with the relationship between the churches and Royal Seating. Regardless of whether Rock Systems or Royal Seating made the initial contact with the churches, the evidence from both parties showed that they were involved jointly in the negotiations with the churches for several months in 2006, that two of the churches sent purchase documentation addressed jointly to Royal Seating and Rock Systems in 2006, and Smith formed Lone Star in December 2006. Smith testified that his first meeting with the churches in California was in May 2006 and that he first contacted Mobiliario in June 2006 about buying direct from Mobiliario:
Q. Did you have any direct relationship with Mobiliario in May of 2006?
A. Not — well no, I guess not, no. Not that early no.
Q. And at that point, every Mobiliario chair that you had sold had come through Royal Seating, right?
A. Yes.
* * *
Q. Now, in — this was in May of 2006, right?
A. To the best of my recollection, yes.
Q. And you went out there [California] thinking you were just meeting with Abundant Living, right?
A. Yes.
Q. And it turns out there was a couple more churches involved, right?
A. Well, at that time, Cottonwood.
Q. Okay. So suddenly the sales potential doubles, right?
A. Well, it wasn't a sale. I mean, I went out to talk to them. There was a potential to sell more chairs.
Q. I'm sorry, maybe you didn't hear my question. I said the sales potential doubled, right?
A. Yes.
Q. Okay. So a month after that, in June of 2006, you go and contact Mobiliario about buying direct from them.
A. That is correct.
Q. And ultimately, all three of these churches ended up buying through Lone Star rather than Royal, right?
A. No, they ended up buying through Rock Systems Group.
Q. Who bought through Lone Star?
A. Correct.
Smith testified that he did not disclose his negotiations with Mobiliario to Royal Seating at that time. The ultimate substitution of Lone Star, as the distributor in the transaction with the churches, also was not disputed. This evidence demonstrates that appellants acted with a conscious desire to prevent the business relationship between the churches and Royal Seating from occurring. See Baty, 63 S.W.3d at 860.
We conclude that the evidence was legally and factually sufficient to support the district court's finding that appellants intentionally interfered with Royal Seating's prospective business relationship with the churches. See City of Keller, 168 S.W.3d at 810; Cain, 709 S.W.2d at 176.
3. Independently tortious or unlawful conduct
Appellants contend that there was no evidence of any independently tortious or unlawful conduct by them. Relying on their lack of a contract with Royal Seating and the non-exclusivity of Royal Seating's distribution agreement with Mobiliario, appellants urge that Rock Systems, as a dealer in auditorium seating, had the right to purchase the chairs from and sell the chairs to any entity that it chose. Royal Seating does not dispute the nature of its relationship with appellants or Mobiliario, but contends that the evidence supports that appellants committed at least two independent torts — fraud and conversion — in their efforts to interfere with the business relationship between the churches and Royal Seating. Because it is dispositive, we limit our review of the evidence to support that appellants' conduct would be actionable under conversion. See Tex. R. App. P. 47.1.
Royal Seating contends that appellants committed fraud by not disclosing that they planned to divert the sales to the churches from Royal Seating to themselves and that they were secretly negotiating with Mobiliario to accomplish this result. See Bradford v. Vento, 48 S.W.3d 749, 754-56 (Tex. 2001) (elements of fraud by non-disclosure); Miller v. Kennedy Minshew, P.C., 142 S.W.3d 325, 345 (Tex. App.-Fort Worth 2003, pet. denied) ("The duty to disclose [a material fact] arises when one party knows that the other party is ignorant of the true facts and does not have an equal opportunity to discover the truth. A fact is material if it would likely affect the conduct of a reasonable person concerning the transaction in question.").
The supreme court in Sturges articulated the standard for the element of "independently tortious" conduct:
By independently tortious we do not mean that the plaintiff must be able to prove an independent tort. Rather, we mean only that the plaintiff must prove that the defendant's conduct would be actionable under a recognized tort.
52 S.W.3d at 726; see also Addison, 171 S.W.3d at 598-99 (evidence sufficient to support intentional interference with prospective business relationship; evidence showed that "reasonable probability" that third party would have entered into contract with appellees absent appellant's fraud and breach of fiduciary duty). The issue then is whether the evidence demonstrates that appellants' conduct in interfering would be actionable under conversion.
"The unauthorized and wrongful assumption and exercise of dominion and control over the personal property of another, to the exclusion of or inconsistent with the owner's rights, is in law a conversion." Waisath v. Lack's Stores, Inc., 474 S.W.2d 444, 447 (Tex. 1971). To establish a claim for conversion of personal property, a plaintiff must prove that: (1) the plaintiff owned or had legal possession of the property or entitlement to possession; (2) the defendant unlawfully and without authorization assumed and exercised dominion and control over the property to the exclusion of, or inconsistent with, the plaintiff's rights as an owner; (3) the plaintiff demanded return of the property; and (4) the defendant refused to return the property. See Smith v. Maximum Racing, Inc., 136 S.W.3d 337, 341 (Tex. App.-Austin 2004, no pet.).
Smith testified that he did not advise Royal Seating that he had received a check from Cottonwood Christian Center in June 2006 that was made payable to "Rock Systems Group/Royal Seating Ltd." and that he deposited the check into Rock Systems's account:
Q. And you got this check that had Royal Seating's name on it from Cottonwood, right?
A. It had — the check read "Rock Systems Group/Royal Seating."
* * *
Q. And did you ever tell Royal Seating you had that check?
A. No.
Q. Did you deposit that check?
A. Yes.
Q. You deposited a check with Royal Seating and Rock Systems' name on it into your account, right?
A. No. The heading of the check first read "Rock System Group/Royal Seating," and it was deposited into the Rock Systems Group account —
Q. By you?
A. — as a deposit.
Q. By you, right?
A. Yes.
Q. And did you ever forward any of those funds to Royal Seating?
A. No.
Q. Did you tell Royal Seating you had them?
A. No.
Royal Seating's vice president Creel similarly testified that Royal Seating never received the funds and that he was told by church officials about the check.
As to the relationship between Lone Star and Rock Systems, Smith testified that he owned and operated both companies out of his home and that they used his personal fax and computers to conduct business. He testified further as to his companies' respective formation and operation and the transfer of funds between the companies and to himself:
Q. When you created Rock Systems back in 2002, did you put $100 into that bank account?
A. To the best of my recollection, yes.
Q. And that was all the capital that you put into the business, right?
A. To just open a bank account.
Q. That's all the capital you put in when you started it, right?
A. As I recall, yes.
Q. And when you needed it, you would get cash out of Rock System's bank account to pay your personal expenses?
A. We had a pay draw — I did.
Q. And you used that to pay personal expenses, right?
A. I used pay draw money as it was needed.
* * *
Q. And is [the owner's equity of Rock Systems] still negative?
A. Yes.
Q. Then you created Lone Star in 2006, right?
A. Yes.
Q. And again, you just put in $100 to start that business, right?
A. I believe it was a very small amount to open a bank account, yes.
Q. And you did not put any money into the business other than that $100, right?
A. As I recall, that's how we opened the bank account, yes.
Q. And is it true that Lone Star does not keep financial books or records?
A. Well, we have — we know — we're beginning to. I mean, we are assembling sales reports and things like that, yes.
Q. When I took your deposition back in August, did you testify that Lone Star does not keep financial books or records?
A. Yes, we don't have any yet.
Q. Okay. Now while Rock Systems was insolvent and not paying the $195,000 that it owed to Royal Seating, during the year 2007, Rock Systems paid Lone Star over half a million dollars, right?
A. Whatever the sales were.
As to the transaction with the churches, Smith further testified that Lone Star acted as the distributor, Rock Systems paid Lone Star for the chairs, Lone Star was insolvent at the end of 2007, and Smith received a monthly draw from Lone Star:
Q. But as far as Lone Star, any time Lone Star made a sale to Rock Systems, Rock Systems paid for that sale, right?
A. Whenever the payments were made, eventually, yes.
Q. And those payments — you know from the sales that were made in 2007 that Rock Systems paid over half a million dollars to Lone Star Seating, right?
A. That's probably right, yes.
Q. And Lone Star is paying you a monthly draw, right?
A. Yes.
* * *
Q. [Lone Star] was clearly insolvent then [at the end of 2007], right?
A. Yes.
The district court could have credited this evidence to find that appellants' conduct concerning the check that included Royal Seating as a payee would be actionable under the tort of conversion and that this conduct interfered with the business relationship between Royal Seating and the churches. See id. We conclude that the evidence was legally and factually sufficient to support the district court's finding that appellants' conduct in interfering with the relationships between Royal Seating and the churches was independently tortious or unlawful. See City of Keller, 168 S.W.3d at 810; Cain, 709 S.W.2d at 176.
4. Actual damages
Appellants contend that there was no evidence that their conduct caused actual damage to Royal Seating or that any of the appellants prevented Royal Seating from selling chairs to the churches. The evidence showed that the transaction with the churches was completed as contemplated with the exception that Lone Star was substituted for Royal Seating as the distributor. Royal Seating's vice president Creel testified that, because of the substitution, Royal Seating lost the sale of 8,700 chairs and that its profit would have been $9 per chair or $78,300 — the amount awarded by the district court for Royal Seating's claim of tortious interference. We conclude that the evidence was sufficient to support that appellants' conduct caused Royal Seating damage. See City of Keller, 168 S.W.3d at 810; Cain, 709 S.W.2d at 176. We overrule appellants' first issue.
Interference by Party to Transaction
In their second issue, appellants contend that the evidence is legally insufficient to support the district court's finding that Rock Systems interfered with a prospective business relationship with the churches because a party to a business relationship cannot interfere with itself. Rock Systems contends that it was a party to all of the business transactions that formed the relationship between Royal Seating, Rock Systems, and the churches.
We agree that a party to a contract cannot tortiously interfere with itself. See Holloway v. Skinner, 898 S.W.2d 793, 795 (Tex. 1995). But Rock Systems misstates Royal Seating's claim. Royal Seating did not claim that Rock Systems interfered with a relationship that Rock Systems had with the churches but that Rock Systems interfered with the prospective business relationship between Royal Seating and the churches. Based on this record, the district court could have concluded that Royal Seating and the churches would have entered into a business relationship absent appellants' tortious interference. See Addison, 171 S.W.3d at 598-99. We overrule appellants' second issue.
CONCLUSION
Having overruled appellants' issues, we affirm the district court's judgment.
DISSENTING OPINION
Despite the fact that Royal Seating did not produce legally sufficient evidence to support two of the essential elements of a claim for tortious interference, the majority shows unwarranted and improper deference to the trial court and affirms the trial court's erroneous judgment. Because Royal Seating failed to show a reasonable probability that Royal Seating would have entered into a business relationship with the churches or that Rock Systems's conduct was independently tortious or wrongful, I must respectfully dissent.
Factual Summary
In its summary of the evidence, the majority fails to note significant testimonial and documentary evidence showing gaps in Royal Seating's arguments. Although we are required to show deference to the trial court as finder of fact in a bench trial, in considering the sufficiency of the evidence, we must also be mindful that in some cases, certain evidence may not be credited just as other evidence may not be disregarded by a reasonable fact-finder. See City of Keller v. Wilson, 168 S.W.3d 802, 807 (Tex. 2005).
The parties called only three witnesses — Rick Creel, Royal Seating's second vice-president, Smith, owner of both Rock Systems and Lone Star Seating, and Gary Pemberton, former project manager for Royal Seating. Creel testified that Royal Seating does not contract directly with end users and instead enters into individual contracts with independent dealers, who work with the end users. Creel further testified that Royal Seating did not have a contract or exclusive arrangements with Rock Systems that would have required Rock Systems to buy chairs from Royal Seating. Although Creel said, "It was our intent to sell to those three churches" through Rock Systems as Royal Seating's dealer, he also testified that "[a]s far as I know," Rock Systems could have bought chairs from any distributor it wished. Gary Pemberton's testimony was similar. He said that Royal Seating did not have a written contract of any kind with Rock Systems and when asked, "Had Rock Systems Group decided that it could get a better deal from Irving or Irwin or some other manufacturer than it could from Royal Seating, could it have elected to buy those chairs from somebody else," Pemberton answered, "They could have, yes." Pemberton also stated that at the time he left Royal Seating on August 31, 2006, Royal Seating was not obligated to provide any chairs to any of the churches.
When Creel was asked for his recollection about how the potential sale to the California churches arose, he answered, "My recall, my recollection was that they — we were contacted about three churches that they were working with in California, and they wanted — they were interested in Royal Seating's chairs . . . and that based on that interest, they wanted to do business with us — the churches wanted to do business with us. And we informed them that we did not sell direct. We are a dealer-based organization, and we informed them we do not sell direct and that we would have to have a dealer. And so at that point, basically, they said, well, the Royal Seating chairs and the warranty along with is what they were interested in. And then we looked at a dealer that would fit." Creel testified that Jensine Bard, who he said "was a representative that had information on our product," "was working with Mr. Lazarian, who was the construction manager for the projects there in California that he'd been asked to serve. And so Jensine had been the one that talked with Steve Lazarian."
Creel was not asked to clarify and the record does not reflect who Creel meant when he said "them" or that "they" wanted to do business with Royal Seating.
Other than Creel's vague statement that Bard was "a representative" with information about Royal Seating's products, the record does not show what her relationship was with Royal Seating.
The evidence is similarly vague as to what role Lazarian had in the church projects. Creel thought Lazarian was a "construction manager" for "some" of the churches; Smith testified that Lazarian was merely a consultant on two of the projects who lacked purchasing authority, although he gave himself the title of construction manager; and Pemberton testified that it was his "understanding" that Lazarian was a construction manager for "some" of the churches. The emails from Lazarian do not shed light on what his role and authority were.
In contrast to Creel's vague testimony about his "recall" and what "they" may have said, Smith testified that the first contact with any of the churches came from Ron Hester, one of Rock Systems's salesmen, who had moved to California and was attending church at ALC. Hester contacted ALC's pastor and soon learned that ALC's pastor was friends with Cottonwood's pastor and that both churches were planning projects requiring auditorium seating. Smith testified that ALC's pastor told Hester to talk to Steve Lazarian about the Cottonwood project and asked if "maybe you guys could cut us a deal if both churches bought chairs." An email from Smith to Royal Seating on December 1, 2005, supports Smith's testimony. In the email, marked "urgent," Smith asks Royal Seating for a quote for ALC, saying, "[M]y rep in California attends the church and knows the pastor. I believe Series or Irwin has already given them a quote." Gary Pemberton also supported Rock Systems's evidence about the origin of the relationship with the churches: he testified that Rock Systems asked Royal Seating for chair pricing for ALC, that Rock Systems's request for a quote was the first contact Royal Seating had with ALC, and that Smith also told Pemberton about the Cottonwood and EV Free projects. Pemberton testified that he promised Jensine Bard a finding fee "because she had put some initial work into Cottonwood." It was improper for the trial court to disregard undisputed, clear, positive, and direct testimony by Smith and Pemberton that was free from contradictions and inconsistencies and was supported by Smith's email written in late 2005, evidence that shows that the initial contact between the churches and the parties to this suit came through Rock Systems, in favor of Creel's vague and uncertain testimony about what he thought might have happened.
Further, although Creel said it was Royal Seating's "intent to sell to those three churches" through Rock Systems and despite an email from Pemberton to Bard stating that he believed that Rock Systems would soon be issuing purchase orders to Royal Seating and that the churches "fully intend on using our chairs," Royal Seating presented no evidence that the churches, in making their final purchasing decisions, did not legitimately change their mind and decide to buy from Lone Star Seating because Lone Star Seating was able to offer the same or a better bargain for the churches' money. Smith said the church personnel had Royal Seating literature when he arrived for the May 2006 meeting, which he thought was probably provided by Bard. Asked when he learned that Lazarian had been working with Bard to buy chairs, Smith answered, "Not to buy chairs, no. They were going to buy from Irwin [one of Royal Seating's competitors]. It was a done deal. That came out of Steve Lazarian's mouth: Cottonwood was going to buy from Irwin, and that was the fact." Smith testified that although Lazarian may at some point have said differently, the churches never told Smith that they wanted to buy "from" Royal Seating. Royal Seating did not produce any communications from church decision-makers showing that the churches had made a final decision to buy chairs from Royal Seating through Rock Systems. At most, Royal Seating showed that during the negotiations, Lazarian, whose authority was never defined or explained, indicated at one point that he planned to buy Royal Seating's chairs.
Nor did Royal Seating present evidence that it had dealt with persons who were actually authorized to speak on behalf of the churches.
Discussion
In its analysis, the majority completely overlooks the absence of evidence supporting at least two essential elements of Royal Seating's claim against Rock Systems. Royal Seating did not present evidence to show that there was a reasonable probability that it would have entered into a business relationship with the churches or that Rock Systems's conduct was independently tortious or wrongful. See Wal-Mart Stores, Inc. v. Sturges, 52 S.W.3d 711, 726 (Tex. 2000) (plaintiff must prove defendant's "conduct would be actionable under a recognized tort"); Baty v. Protech Ins. Agency, 63 S.W.3d 841, 860 (Tex. App.-Houston [14th Dist.] 2001, pet. denied). Without such evidence, even if Rock Systems's conduct was "`sharp' or unfair," Royal Seating may not prevail on its claim. Sturges, 52 S.W.3d at 726.
Although the law related to tortious interference usually applies in a contractual context, I recognize that such a claim may be raised in the case of "interference with a continuing business or other customary relationship not amounting to a formal contract" and in relation to "prospective quasi-contractual or other restitutionary rights or even the voluntary conferring of commercial benefits in recognition of a moral obligation." Restatement (Second) of Torts § 766B cmt. c (1979). However, it is not improper to cause a third-party not to enter into a business relationship with the plaintiff if the relationship "concerns a matter involved in the competition between" defendant and plaintiff, the defendant does not act wrongfully, the defendant's conduct "does not create or continue an unlawful restraint of trade," and the defendant's "purpose is at least in part to advance his interest in competing" with the plaintiff. Id. § 768(1) (1979). Further, my research did not uncover any Texas cases in which a plaintiff who would not have had some kind of direct contractual or pseudo-contractual relationship with the third-party, and in Sturges, the supreme court said, "There are only a few Texas cases in which the plaintiff has recovered [for tortious interference with a prospective business relationship]." 52 S.W.3d at 725.
All of the illustrations set out in the relevant sections of the Restatement (Second) of Torts involve direct relationships between plaintiffs and third-parties with which defendants interfere. See, e.g., Restatement (Second) of Torts §§ 766, 766C, 767, 768, 769 (1979). The relevant sections also refer to contracts or describe the relationships as "contractual," thus supporting my conclusion that the plaintiff must have sought a direct relationship with the third-party that was wrongfully thwarted by the defendant. See, e.g., id. §§ 766 (Intentional Interference with Performance of Contract by Third Person), 766A (Intentional Interference with Another's Performance of His Own Contract), 766B (Intentional Interference with Prospective Contractual Relation), 766C (Negligent Interference with Contract or Prospective Contractual Relation) (1979) (emphasis added).
The Texas cases to which the supreme court cites are Bradford v. Vento, 997 S.W.2d 713 (Tex. App.-Corpus Christi 1999), rev'd in part, 48 S.W.3d 749 (Tex. 2001), in which a purported buyer of a store sued the seller and mall for interfering with his plans to sell the store to the third-party; Edwards Transports, Inc. v. Circle S Transports, Inc., 856 S.W.2d 783 (Tex. App.-Amarillo 1993, no writ), involving a suit between two transportation companies, both of which had pre-existing relationships and had done business directly with the third-party, although neither had a formal contract with the third-party; State National Bank v. Farah Manufacturing Co., 678 S.W.2d 661 (Tex. App.-El Paso 1984, writ dism'd by agr.), in which the business alleged that a bank that held one of the business's loans interfered with the business's choice of leadership; Light v. Transport Insurance Co., 469 S.W.2d 433 (Tex. Civ. App.-Tyler 1971, writ ref'd n.r.e.), involving a dispute between an agent and an insurer who took a customer away from the agent by writing insurance in violation of state law; Griffin v. Palatine Insurance Co., 235 S.W. 202 (Tex. Comm'n App. 1921, judgm't adopted), in which several insurers refused to sell insurance to a business that refused a settlement after a fire, resulting in the business being unable to obtain any insurance; Celli Del Papa v. Galveston Brewing Co., 227 S.W. 941 (Tex. Comm'n App. 1921, judgm't adopted), in which the defendant brewing company threatened its tenant saloons to make the saloons stop buying beer and other products from the plaintiff liquor distributor; American Freehold Land Mortgage Co. v. Brown, 118 S.W. 1106 (Tex. Civ. App. 1909, writ ref'd), in which the defendant mortgage company allegedly told the plaintiff's customers that the plaintiff, a lending agent, was neglectful, irresponsible, and insolvent; Robison v. Texas Pine Land Association, 40 S.W. 843 (Tex. Civ. App. 1897, no writ), in which the defendant company was accused of threatening to fire any employee that used vouchers issued by the company to buy goods from the plaintiff's store; and International G.N. Railway v. Greenwood, 21 S.W. 559 (Tex. Civ. App. 1893, no writ), in which the railroad was accused of encouraging its employees to boycott the plaintiff's boarding house. Every one of those cases involves a plaintiff who had or stood to have a direct business relationship with the third-party.
A customer is entitled to solicit bids and conduct in-depth negotiations right up until the moment it enters into a contract. Involvement in negotiations and giving signs of planning to buy from one company does not bar a customer from changing its mind at the last minute. The fact that there are ties between Rock Systems and Lone Star Seating does not change the fact that, if any of Royal Seating's competitors, including Lone Star Seating, could give the churches the same or a better deal, there is no reason that Rock Systems could not change its intentions and buy chairs from the competitor instead of Royal Seating. Royal Seating asserts that it presented evidence "that it had business relations with the three churches which were to culminate in profitable contracts," but concedes that it never would have entered into a contractual relationship with the churches. Although Royal Systems produced various emails from Pemberton, Jensine Bard, Smith, and Lazarian documenting the parties' negotiations and bidding for contracts to provide the churches with auditorium seating, Royal Seating's arrangement with Rock Systems was not exclusive, and both Pemberton and Creel testified that Rock Systems was not bound to accept Royal Seating's bids to provide chairs for its end users.
I recognize that Royal Seating provided a March 2007 email from Lazarian stating that the churches wanted to buy their chairs from Royal Seating, but as I have said, Lazarian's role in the projects is unclear, and despite that email, the final purchase orders signed by church representatives indicated that the chairs would be provided by Lone Star Seating, not Royal Seating. Royal Seating did not present any evidence showing that the churches were misled into believing their chairs were from Royal Seating instead of Lone Star Seating.
Royal Seating did not produce any evidence that Rock Systems was obligated to choose Royal Seating's bid in satisfying an end user's request and showed only that it was bidding for the churches' business. Rock Systems contracted with the churches for a particular chair at a particular price, and the evidence presented by Royal Seating shows that Rock Systems was legally entitled to contract with any of its distributors to satisfy the churches' needs. Although Royal Seating might have hoped Rock Systems would choose Royal Seating's chairs and the churches may have given indications that they planned to do so, Royal Seating certainly did not prove that it had a right to assume that it would benefit from Rock Systems's contracts with the churches.
The parties did not present evidence about what involvement, if any, the end user has in the decision-making process or whether the end user discusses bids and products with Rock Systems, with the two making a joint decision as to what distributor will be used.
Under its non-exclusive arrangements with its dealers, Royal Seating might at most be an incidental third-party beneficiary to its dealers' contracts with end users. However, a third-party beneficiary only has rights under a contract if it is an intended beneficiary. See Restatement (Second) of Contracts §§ 302, 304 (1981). "An incidental beneficiary acquires by virtue of the promise no right against the promisor or the promisee." Id. § 315 (1981).
Further, although Royal Seating claims Rock Systems committed fraud or conversion, there is no evidence to show that Rock Systems committed either tort and thus no evidence that Rock Systems's conduct was independently tortious or wrongful.
I must note that in its findings of fact and conclusions of law, the trial court simply "found" without any explanation that Rock Systems's conduct "was independently tortious and unlawful." This, however, is not a finding of fact but instead is a conclusion of law, and the court made no findings related to what specific conduct was unlawful or tortious.
Fraud is an action, omission, or concealment in breach of a legal duty or trust that injures another or gives the wrongdoer an unfair advantage. Jones v. Texas Dep't of Protective Regulatory Servs., 85 S.W.3d 483, 491 (Tex. App.-Austin 2002, pet. denied) (quoting Vela v. Marywood, 17 S.W.3d 750, 760-61 (Tex. App.-Austin 2000), pet. denied, 53 S.W.3d 684 (Tex. 2001)). "[A] party to a contract is free to pursue its own interests, even if it results in a breach of that contract, without incurring tort liability," and "[t]he fact that one businessman trusts another, and relies upon his promise to perform a contract, does not rise to a confidential relationship." Crim Truck Tractor Co. v. Navistar Int'l Transp. Corp., 823 S.W.2d 591, 594 (Tex. 1992).
Royal Seating contends that Rock Systems committed fraud by not disclosing that they planned to buy the churches' seating from Lone Star Seating instead of Royal Seating or that they were in negotiations with Mobiliario to become a distributor. However, Royal Seating has not shown that Rock Systems had any legal duty to disclose its plans — there was no contract or exclusive arrangement between Royal Seating and Rock Systems, and Pemberton testified that Rock Systems could have bought chairs from any of Royal Seating's competitors. Absent a contractual provision or fiduciary duty, neither of which is present here, Rock Systems was not obligated to tell Royal Seating that it planned to establish Lone Star Seating as a competing distribution company or that it planned to order chairs from Lone Star Seating.
"[F]iduciary duties may arise in the context of informal moral, social, domestic, or personal relationships in which one person trusts and relies on another. However, a fiduciary relationship is an extraordinary one and will not be lightly created; the mere fact that one subjectively trusts another does not, alone, indicate that he placed confidence in another in the sense demanded by a fiduciary relationship, because something apart from the transaction between the parties is required." Stephanz v. Laird, 846 S.W.2d 895, 901-02 (Tex. App.-Houston [1st Dist.] 1993, writ denied) (citation omitted); see Grinnell v. Munson, 137 S.W.3d 706, 718 (Tex. App.-San Antonio 2004, no pet.) (fiduciary relationship is "extraordinary" and not recognized lightly). Although Royal Seating alleged that Rock Systems breached fiduciary duties, the trial court's so-called findings and conclusions speak only to tortious interference.
Further, the only evidence related to the churches' wishes came through emails between Lazarian and representatives of Rock Systems and Royal Seating. At most Royal Seating proved that at one stage in the negotiations, Lazarian, someone with unknown authority for decision-making on behalf of the churches, stated that he wanted to buy from Royal Seating. Royal Systems provided no direct evidence from the churches, such as testimony by or affidavits from church decision-makers showing that, in making their final decision, the churches told Rock Systems to order from Royal Seating or were somehow misled into believing the chairs were coming from Royal Seating instead of Lone Star Seating. In other words, there is no evidence that the churches were not persuaded through legitimate business practices to switch from Royal Seating to Lone Star — the offering of a better price or other non-wrongful competitive conduct cannot support a tortious interference claim. Indeed, the fact that the final purchase orders refer to Lone Star Seating would support an inference that the churches knew exactly who would be supplying their chairs.
As for Royal Seating's argument that Rock Systems committed conversion when it cashed a deposit check from Cottonwood without disclosing it to Royal Seating, the evidence does not establish that Royal Seating had any ownership or possession rights to the check. See Apple Imports, Inc. v. Koole, 945 S.W.2d 895, 899 (Tex. App.-Austin 1997, writ denied) (to establish conversion, plaintiff must prove it had legal possession of or entitlement to possession of property, defendant unlawfully and without authorization took control over property to exclusion of or inconsistent with plaintiff's ownership rights, plaintiff demanded property's return, and defendant refused). Without such evidence, Royal Seating cannot show conversion. See id.
The disputed check is from Cottonwood and is made out to "ROCK SYSTEMS GROUP/ROYAL SEATING LTD" in the amount of $105,487.50. The check references "ID#: 61132" and was dated July 12, 2006. That purchase order was not introduced into evidence, and it is not clear whether it was prepared by Rock Systems or Cottonwood. The parties also introduced (1) purchase order number 6106 written on Cottonwood's letterhead on May 31, 2006, addressed to "ROCK SYSTEMS GROUP/ROYAL SEATING LTD.," and stating that the church was ordering 3,600 Alessandria chairs for a total of $461,601.00, that a deposit of "25% of total price" was required, that the order and deposit were "subject to acknowledgment by Royal Seating," and that the order was subject to a more definitive agreement; (2) an email from Rock Systems to Royal Seating dated June 29, 2006 stating, "This is a preliminary purchase order for your file, I have not received the deposit or fabric selection yet," and asking Royal Seating to fax a letter "stating that Royal Seating has received the PO asap"; and (3) a fax from Royal Seating to Rock Systems dated June 29, 2006, acknowledging receipt of Rock Systems's "Purchase Order *RSG PO# 206-03CA for the Cottonwood Christian Center" for 3,600 Alessandria chairs. Creel testified that Royal Seating's fax was sent in response to Rock System's email.
The parties did not introduce into evidence purchase order 206-03CA, referenced in the email and fax, and the check, written about two weeks later and not written for 25% of the total price of Cottonwood's purchase order 6106. The trial court seems to have ignored the fact that the evidence does not show that a Cottonwood representative ever saw Royal Seating's fax, much less that the check was related or written in response to the fax. More important, Cottonwood's mistaken use of Royal Seating's name on the check does not give Royal Seating a right to possession of the money. I cannot imagine that the majority intends to hold that, if a payor mistakenly writes an additional name as a payee on a check, that named party is instantly and legally entitled to the proceeds of the check, regardless of the contractual arrangements surrounding the writing of the check. Instead, the majority should recognize that the contract under which the check was apparently written was between Cottonwood and Rock Systems alone, and that Royal Seating had no right to any of the deposit money until Rock Systems sent a final purchase order to Royal Seating. Because Royal Seating did not show any right to possession of the Cottonwood funds, there is no evidence to show that Rock Seating committed conversion with relation to the check. See id.
Twenty-five percent of $461,601.00 is $115,400.25, not $105,487.50.
Royal Seating introduced several purchase orders prepared by Rock Systems for the churches throughout the negotiations. Some of them are written on letterhead that reads, "Rock Systems Group/Royal Seating Ltd." Others are written on letterhead in Rock Systems's name alone, and still others on letterhead for Rock Systems/Lone Star Seating. Smith testified that he created the letterhead including the one for "Rock Systems Group/Royal Seating Ltd.," and there was no evidence that Royal Seating endorsed or even knew about the letterhead. All of the purchase orders prepared by Rock Systems, whether on letterhead for Rock Systems, Rock Systems/Royal Seating, or Rock Systems/Lone Star Seating, state that deposit checks should be made payable to Rock Systems Group, not to Rock Systems and some other entity.
Conclusion
I believe the trial court clearly erred in its review and weighing of the evidence. Royal Seating utterly failed to present legally sufficient evidence to show at least two elements of its tortious interference claim, and therefore is not entitled to recover. The majority has glossed over the evidentiary gaps in its determination to affirm the trial court. I would reverse the portion of the trial court's judgment finding in favor of Royal Seating on its tortious interference claim and would remand the cause for a new determination of attorney's fees.